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Red Lobster loses money on $20 unlimited shrimp......no big surprise! Login/Join 
Member
Picture of lkdr1989
posted
Good grief, I could have saved them millions by telling them this was going to be a money-losing promotion Roll Eyes


quote:

Red Lobster says unlimited shrimp promotion was too popular and too cheap.

The casual restaurant chain's corporate parent says a $20 all-you-can-eat shrimp deal contributed to bigger losses for the company

Red Lobster's parent company, Thai Union Group, disclosed earlier this month that the seafood chain took an unexpectedly large loss in the third quarter of the year because its $20 shrimp promotion wasn't very profitable and was more popular than the company anticipated.

"The proportion of the people selecting this promotion was much higher compared to expectation," Chief Financial Officer Ludovic Garnier said in Thai Union Group's investor and media presentation Nov. 7.

Red Lobster has had an all-you-can-eat shrimp promotion for years, but this year it changed the shrimp deal from a limited-time offer to a permanent one. The company wanted to boost traffic in the third and fourth quarters of the year, when its business tends to slow down.

Garnier said the strategy worked, bringing in customers and bolstering Red Lobster’s market share. But the improvement wasn’t as large as the company expected, and combined with the low margins on the surprisingly popular deal, that presented a problem.

He said U.S. consumers are getting more budget-conscious, meaning they are eating at less-expensive restaurants and even ordering cheaper items when they go out. That contributed to the unexpected popularity of "Ultimate Endless Shrimp."

While the deal brought in some more customers, Garnier's comment suggested that people who might have ordered something on the menu that was more lucrative for Red Lobster instead traded down to the unlimited shrimp instead.

"We knew the price was cheap, but the idea was to bring more traffic in the restaurant," he said.

In response, the company gradually raised the price on the shrimp item from $20 to $22 and now $25.

“It’s one of the iconic promotions for Red Lobster, so we want to keep it in the menu but, of course, we 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,” Garnier said.

The company had expected Red Lobster to lose money in the second half of the year, but it lost more than Thai Union Group anticipated because of that shift in consumer spending and the performance on the "Ultimate Endless Shrimp" promotion.

Combined with problems in other divisions, that contributed to Thai Union Group saying it will take a larger loss this year than it originally expected.

Thai Union Group invested in Red Lobster in 2016 and, combined with a group of other investors, it bought the rest of the company from Golden Gate Capital in 2020.

Bloomberg News reported in March that Thai Union Group might sell its stake in Red Lobster if its performance didn't improve.


https://www.nbcnews.com/busine...n-popular-rcna127381




...let him who has no sword sell his robe and buy one. Luke 22:35-36 NAV

"Behold, I send you out as sheep in the midst of wolves; so be shrewd as serpents and innocent as doves." Matthew 10:16 NASV
 
Posts: 4406 | Location: Valley, Oregon | Registered: June 03, 2010Reply With QuoteReport This Post
No, not like
Bill Clinton
Picture of BigSwede
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About twenty years ago they did an all you can eat crab leg promotion, myself and a friend put a hurtin on them a few times. No way they made money



 
Posts: 5719 | Location: GA | Registered: September 23, 2009Reply With QuoteReport This Post
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Picture of konata88
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If margins are positive, no matter how slim, how does amount of traffic lead to loses? I can see how higher than expected consumption per patron is losing but how does traffic play here? More traffic means more people who will consume more than anticipated? And on average, the over consumption is about 25% more than anticipated?

Is this good shrimp? Or shrimp from dirty waters in chicom, etc?

I’m not sure I’ve ever been to RL before. Don’t know what it’s like. But $20-25 sounds expensive to me, not cheap.




"Wrong does not cease to be wrong because the majority share in it." L.Tolstoy
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Posts: 13214 | Location: In the gilded cage | Registered: December 09, 2007Reply With QuoteReport This Post
Member
posted Hide Post
The way to control the all you can eat shrimp is adding a lot of spice. Cajun style plus. I always hated Red Lobster. Overpriced stale seafood. After you buy it off the docks Red Lobster does not compare.
 
Posts: 17695 | Location: Stuck at home | Registered: January 02, 2015Reply With QuoteReport This Post
Savor the limelight
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I buy wild caught Argentine Reds for under $10/lb. I'm sure Red Lobster uses cheaper shrimp than that. I'd have a hard time putting away much more than a pound of shrimp, especially if there's salad and biscuits.

They'd lose money on my 17 year old son though. Kid is 5'11", 165lbs, 31" waist and can put the food away. The running joke on his swim team is you had better get in the food line before him if you want to eat.
 
Posts: 11968 | Location: SWFL | Registered: October 10, 2007Reply With QuoteReport This Post
Mensch
Picture of kz1000
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It was called Black Lobster when I was a teen [Not trying to cast aspersions on black members here].


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"The Nazis entered this war under the rather childish delusion that they were going to bomb everyone else, and nobody was going to bomb them. At Rotterdam, London, Warsaw and half a hundred other places, they put their rather naive theory into operation. They sowed the wind, and now they are going to reap the whirlwind."
-Bomber Harris
 
Posts: 16148 | Location: Ivorydale | Registered: January 21, 2005Reply With QuoteReport This Post
quarter MOA visionary
Picture of smschulz
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I won a bet with a buddy maybe 10-yrs ago or so.
It was for a lobster dinner.
We went to a nice-at-the-time seafood place that had "all the lobster you could eat for $34" and in included some sides, salad etc.
We must have had 10 each maybe more and went out stuffed.
Don't see those "all you can eat" offers much anymore. Cool
 
Posts: 23407 | Location: Houston, TX | Registered: June 11, 2006Reply With QuoteReport This Post
His Royal Hiney
Picture of Rey HRH
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I'm not going to cry a river for them or even break out the smallest violin. You have restaurants operating on an all-you-can-eat menu, not just one selection.

I wasn't a fan as it's always too heavily breaded and too salty.



"It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946.
 
Posts: 20248 | Location: The Free State of Arizona - Ditat Deus | Registered: March 24, 2011Reply With QuoteReport This Post
Eschew Obfuscation
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There was a place near me that advertised all-you-can-eat wings during Bears games.

I'm sure it was profitable for them because our waitress made herself so scarce that she could have been designated an endangered species.

Folks can't eat too many wings when there's no way to order them.


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Posts: 6643 | Location: Chicago, IL | Registered: December 17, 2007Reply With QuoteReport This Post
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Posts: 1114 | Location: Texas | Registered: September 18, 2019Reply With QuoteReport This Post
Raised Hands Surround Us
Three Nails To Protect Us
Picture of Black92LX
posted Hide Post
quote:
Originally posted by smschulz:
I won a bet with a buddy maybe 10-yrs ago or so.
It was for a lobster dinner.
We went to a nice-at-the-time seafood place that had "all the lobster you could eat for $34" and in included some sides, salad etc.
We must have had 10 each maybe more and went out stuffed.
Don't see those "all you can eat" offers much anymore. Cool


In 2007 a decent sized group of us forum members met for dinner in Orlando when we were attending Shot Show.
Forget the name of the place we ate but they had an all you can eat lobster if you wanted. Now granted their lobsters were glorified crawfish but still pretty tasty.
I just remember thinking there is no way they are making any money even with alcohol.

Anyone still have the pictures from that outing by chance?


————————————————
The world's not perfect, but it's not that bad.
If we got each other, and that's all we have.
I will be your brother, and I'll hold your hand.
You should know I'll be there for you!
 
Posts: 25827 | Registered: September 06, 2003Reply With QuoteReport This Post
186,000 miles per second.
It's the law.




posted Hide Post
Can't imagine eating a crap-ton of cheap farm raised shrimp. Yuck.

Good shrimp aren't cheap. Cheap shrimp aren't good.
 
Posts: 3285 | Registered: August 19, 2001Reply With QuoteReport This Post
Get my pies
outta the oven!

Picture of PASig
posted Hide Post
I have to LOL at these rocket scientist executives scratching their heads and wondering why this was a disaster for them. “Gee…it looks like people are looking for value…DERP!” Ya think?

All I know is I used to be able to take the Wife out and eat at a half decent restaurant for about 50 bucks total and now that’s pushing $90-$100.

quote:
Originally posted by CoolRich59:
There was a place near me that advertised all-you-can-eat wings during Bears games.

I'm sure it was profitable for them because our waitress made herself so scarce that she could have been designated an endangered species.

Folks can't eat too many wings when there's no way to order them.


That seems to be a standard move around here with our Red Robin’s and their so-called “bottomless fries”

You decide you want some more fries and ask the waiter and then they promptly disappear for the rest of the meal and then show up at the end when you’re ready to pay apologetically asking “did you still want those fries?” Roll Eyes

I guarantee you they are instructed to do this by their management.


 
Posts: 35139 | Location: Pennsylvania | Registered: November 12, 2007Reply With QuoteReport This Post
Ammoholic
Picture of Skins2881
posted Hide Post
quote:
Originally posted by BigSwede:
About twenty years ago they did an all you can eat crab leg promotion, myself and a friend put a hurtin on them a few times. No way they made money


They lost a bunch of money on that too. It was written up in one of the financial magazines.



Jesse

Sic Semper Tyrannis
 
Posts: 21336 | Location: Loudoun County, Virginia | Registered: December 27, 2014Reply With QuoteReport This Post
would not care
to elaborate
Picture of sse
posted Hide Post
quote:
Originally posted by BigSwede:
About twenty years ago they did an all you can eat crab leg promotion, myself and a friend put a hurtin on them a few times. No way they made money

When I use to visit my daughter at college she went after that every time without fail.
 
Posts: 3076 | Location: USA | Registered: June 12, 2008Reply With QuoteReport This Post
would not care
to elaborate
Picture of sse
posted Hide Post
quote:
Originally posted by FishOn:
Can't imagine eating a crap-ton of cheap farm raised shrimp. Yuck.

Good shrimp aren't cheap. Cheap shrimp aren't good.

I can go to a coney place and get 21 shrimp in a basket, with fries, for just under 9 bucks...extra lemon, cocktail sauce and ketchup, please...LOL
 
Posts: 3076 | Location: USA | Registered: June 12, 2008Reply With QuoteReport This Post
Oriental Redneck
Picture of 12131
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About 20 yeas ago, Mrs Q and I went to Orlando for vacation. There was a AYCE seafood buffet place close to where we stayed, Boston Lobster Feast. We went there everyday, $25/person. Amazingly cheap, and man, the AYCE lobsters were delicious. We checked on it earlier this year, and it's now $60/person, iirc. I say, at this price, I would still eat there. But not everyday, though.


Q






 
Posts: 28196 | Location: TEXAS | Registered: September 04, 2008Reply With QuoteReport This Post
Raised Hands Surround Us
Three Nails To Protect Us
Picture of Black92LX
posted Hide Post
quote:
Originally posted by 12131:
About 20 yeas ago, Mrs Q and I went to Orlando for vacation. There was a AYCE seafood buffet place close to where we stayed, Boston Lobster Feast. We went there everyday, $25/person. Amazingly cheap, and man, the AYCE lobsters were delicious. We checked on it earlier this year, and it's now $60/person, iirc. I say, at this price, I would still eat there. But not everyday, though.


This may be the place we went during Shot Show in 2007 I mentioned.
That name sounds quite familiar.


————————————————
The world's not perfect, but it's not that bad.
If we got each other, and that's all we have.
I will be your brother, and I'll hold your hand.
You should know I'll be there for you!
 
Posts: 25827 | Registered: September 06, 2003Reply With QuoteReport This Post
Oriental Redneck
Picture of 12131
posted Hide Post
^^^ It's on International Dr.


Q






 
Posts: 28196 | Location: TEXAS | Registered: September 04, 2008Reply With QuoteReport This Post
Member
posted Hide Post
I wouldn’t foist that crap on anybody.

Are the Argentine Reds similar to royal reds ? Royal reds are caught at like 1000 feet deep and have a taste more like lobster than shrimp. Here in the gulf coast we do get amazingly fresh seafood and down on the waterfront in Pensacola is a family fish market that’s been there about 90 years. For a party or especially out of town guests and we are fixing a shrimp boil or fish fry we go to Joe Patti’s and get some fresh gulf shrimp. That place is an amazing experience and all kinds of fresh caught seafood is available.
 
Posts: 5106 | Location: Florida Panhandle  | Registered: November 23, 2008Reply With QuoteReport This Post
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