The initial plan was straightforward: Red Lobster locations typically experience a slowdown in business during the third and fourth quarters, prompting its parent company, Thai Union, to introduce a new promotion.
READ: How a Classic Film Catapulted Macy’s Thanksgiving Day Parade to National Stardom!
Customers were offered the opportunity to enjoy unlimited shrimp for $20. While this promotion had been a longstanding tradition for over 18 years, in June, Thai Union announced that “Ultimate Endless Shrimp” would become a permanent fixture on the menu.
Red Lobster
In an earnings call, Thai Union CFO Ludovic Garnier explained that the intention was to attract more customers to the restaurants despite the low price. However, the success of the plan exceeded expectations, leading to an approximately $11 million loss for the chain in the third quarter of 2023.
For the $20 price, patrons could start with two shrimp and continue ordering from a variety of options, including coconut shrimp, linguini alfredo, and grilled shrimp skewers.
Red Lobster did see a 2% increase in traffic compared to the last quarter and a 4% increase compared to the previous year. Nevertheless, the company did not anticipate such a high proportion of customers opting for the “Ultimate Endless Shrimp” deal.
Garnier acknowledged during the call, “On this promotion, we don’t earn a lot of money. At $22 we don’t. The idea was to bring some traffic.”
While the promotion has become iconic for Red Lobster, adjustments are now necessary to maintain its presence on the menu. The company has gradually increased the price, first from $20 to $22 and now settling at $25.
Garnier emphasized the need for careful consideration of the entry and price points for such promotions, stating, “We need to be much more careful regarding what is the entry point and what is the price point we’re offering for this promotion.”
