Get All Access for $5/mo

Red Lobster Lost Nearly $11 Million Because People Love Endless Shrimp: 'We Need to Be Much More Careful' The restaurant chain, which is owned by Thai Union Group, made the promotion a menu mainstay in June.

By Emily Rella

Opinions expressed by Entrepreneur contributors are their own.

Promises of unlimited or endless anything at a restaurant chain can seem like a good deal for customers.

But for restaurants, maybe not.

For the seafood chain Red Lobster, an unlimited deal actually cost the company millions because it was too popular.

For over 18 years, Red Lobster has offered its famous "Endless Shrimp" deal — for $20, patrons can eat as much of its various styles of shrimp as they want during a limited-time, once-a-year promotion.

Related: Red Lobster CEO Resigns After Only 8 Months

This year, the chain (which is owned by parent company, Thai Union Group) decided to make the promotion a menu mainstay and offer the deal all day, every day, regardless of the month or date.

The result? A nearly $11 million profit loss in Q3 2023.

"We knew the price was cheap. But the idea was to bring more traffic in the restaurants," Thai Union CFO Ludovic Garnier said in an earnings call.

The plan was to increase foot traffic during Q3 and Q4, which grew 4% year over year, but profits fell as the majority of those customers coming into eat were opting in for the cheaper deal.

"Something, which was different from our expectations, is the proportion of the people selecting this promotion was much higher compared to expectation," Garnier said. "It's one of the iconic promotions for Red Lobster, so we want to keep it in the menu but, of course, 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."

Related: Red Lobster Accused of False Advertising in Lawsuit: Report

It's noted that the price of the endless deal was raised from $20 to $22, and now is being offered for $25.

Garnier cited the promotion as a "key reason" for Red Lobster's net loss in Q3 and the company is now looking at an estimated $20 million loss in total for 2023.

Thai Union Group was down just over 14% year over year.

Emily Rella

Senior News Writer

Emily Rella is a Senior News Writer at Entrepreneur.com. Previously, she was an editor at Verizon Media. Her coverage spans features, business, lifestyle, tech, entertainment, and lifestyle. She is a 2015 graduate of Boston College and a Ridgefield, CT native. Find her on Twitter at @EmilyKRella.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Leadership

Visionaries or Vague Promises? Why Companies Fail Without Leaders Who See Beyond the Bottom Line

Visionary leaders turn bold ideas into lasting impact by building resilience, clarity and future-ready teams.

Marketing

5 Critical Mistakes to Avoid When Giving a Presentation

Are you tired of enduring dull presentations? Over the years, I have compiled a list of common presentation mistakes and how to avoid them. Here are my top five tips.

Side Hustle

'Hustling Every Day': These Friends Started a Side Hustle With $2,500 Each — It 'Snowballed' to Over $500,000 and Became a Multimillion-Dollar Brand

Paris Emily Nicholson and Saskia Teje Jenkins had a 2020 brainstorm session that led to a lucrative business.

Green Entrepreneur®

How Global Business Leaders Can Build a Sustainable Supply Chain

Businesses can build sustainable supply chains by leveraging technology to reduce environmental impact, optimize resources and track emissions while balancing operational efficiency and sustainability goals.

Productivity

6 Habits That Help Successful People Maximize Their Time

There aren't enough hours in the day, but these tips will make them feel slightly more productive.

Science & Technology

Why Businesses Are Relying on Automation to Survive the Labor Crisis

Robots are revolutionizing industries by addressing labor shortages and enhancing efficiency, while businesses navigate challenges like workforce adaptation and high implementation costs.