Red Lobster Loses Millions on All-You-Can Eat Shrimp Deal
When Red Lobster announced that its all-you-can-eat shrimp deal was to become a permanent fixture on its menu, shrimp lovers thought it was a dream come true but it turned into a nightmare for the restaurant chain’s bottom line.
You can definitely call this deal a loss leader.
According to industry insider publication, Restaurant Business, while traffic to Red Lobster has increased by about 4% it saw a loss of a little over $11 million in the third quarter. The corporate owner of Red Lobster put the blame squarely on the Ultimate Endless Shrimp deal.
The company’s CFO said that they knew the price was cheap but didn’t expect the endless shrimp deal to be quite so popular.
When announcing the offer, Red Lobster said it was an “irresistible offer now available all day, every day.”
Guests choose shrimp options to start, and when they are ready for more, they can order additional shrimp selections. Each Ultimate Endless Shrimp meal is accompanied by a choice of side and warm Cheddar Bay Biscuits. The deal features their Garlic Shrimp Scampi, Coconut Shrimp, Shrimp Linguini Alfredo, Walt’s Favorite Shrimp, and Garlic Grilled Shrimp Skewer.
Ultimate Endless Shrimp started at a price of about $20 for the deal but the company has since raised that to $25 after experiencing the loss.
On Long Island, Red Lobster has locations in Ronkonkoma, Stony Brook, Deer Park, Copaigue, Carle Place, Hicksville and Valley Stream.
