Red Lobster’s endless shrimp advertising was a factor in its $11 million operating loss

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Hoping to attract more customers in the summer and fall, Red Lobster is hosting events in June made one of its most popular specialty dishes a menu staple: Ultimate Endless Shrimp.

In recent months, the restaurant has seen an increase in the number of customers paid $20 to eat as many shrimp as they wanted. But the offering that Red Lobster once called “irresistible” may have been too popular for the restaurant itself.

Thai Union Group, a Thailand-based seafood supplier that owns a significant stake in Red Lobster, said in a recent financial report that the restaurant suffered an operating loss of about $11 million in the third quarter, Restaurant Business first reported. Ludovic Regis Henri Garnier, chief financial officer of Thai Union Group, said on a call with investors in November that the Ultimate Endless Shrimp deal contributed to the financial loss.

“The percentage of people who opted into this promotion was much higher than expected,” Garnier said, according to a transcript of the Nov. 7 call.

Red Lobster did not respond to a request for comment from The Washington Post on Thursday evening.

Ultimate Endless Shrimp has been a featured dish at Red Lobster for more than 18 years and was typically only on the menu on Mondays and special occasions. Red Lobster, which has more than 700 locations, made shrimp a permanent menu item in late June.

Customers initially select two shrimp dishes served with the chain’s signature cheddar biscuits, but can add additional shrimp dishes at no additional cost.

“Insider tip: Avoid grabbing the extra biscuit to make room for endless amounts of shrimp,” Red Lobster said in its June announcement.

More customers began dining at the restaurant than earlier in the year, but many only ordered the Ultimate Endless Shrimp, Thiraphong Chansiri, chief executive of Thai Union Group, said on the call with investors. The deal was so popular that some people on social media competed to eat the most shrimp in one go or devised strategies to eat as many shrimp as possible.

Red Lobster’s third fiscal quarter lasted from July to the end of September.

“The bottom line is that it didn’t deliver what we expected in terms of financial performance,” Garnier said on the call.

Garnier said Red Lobster recently increased the price of Ultimate Endless Shrimp to $25, a change that has improved the restaurant’s operating costs.

Still, Red Lobster is expected to lose nearly $20 million this year, according to Thai Union Group’s latest financial report.

This isn’t the first time Red Lobster has suffered financially from an “endless” meal promotion. In 2003, the restaurant lost millions of dollars by underestimating how many crabs people typically eat at one time.

Other restaurants have struggled financially due to similar promotions, including Olive Garden, which did not offer its never-ending pasta promotion in 2020 and 2021. Applebee’s failed to meet financial expectations in 2004 after serving riblets in an all-you-can-eat format.

Despite Red Lobster’s recent financial losses, the restaurant has no plans to give up his promotion of unlimited shrimp, one of his signature dishes.

“We want to keep it on the menu,” Garnier said. “But of course we have to be much more careful about the entry point and the price that we offer for this promotion.”

Jaclyn Peiser contributed to this report.