Who wouldâve thought that Red Lobster would underestimate the demand for fried and breaded shrimp?
An âUltimate Endless Shrimpâ all-you-can-eat deal offered at the seafood chainâs locations has become a source of financial losses for the company, according to USA Today.
The Ultimate Shrimp deal enables customers to choose two varieties of shrimp â of which they would be served an unlimited amount of servings.
The business strategy behind the deal backfired, according to the CFO of the chainâs parent company, Ludovic Regis Henri Garnier.
Garnier disclosed the thousand cuts by shrimp in a conference call with corporate investors, according to Restaurant Business Magazine.
âWe wanted to boost our traffic, and it didnât work.â
âWe want to keep it on the menu. And of course we need to be much more careful regarding what are the entry points and what is the price point we are offering for this promotion.â
Some fans of the promotion lacked remorse for eating into Red Lobsterâs profits.
The deal â introduced in June â did succeed in driving a 4 percent increase in traffic to Red Lobster locations, at a cost to the companyâs profits.
The company is expecting to incur a $20 million overall loss for the year, and $11.3 million this quarter.
Ultimate Shrimp stays on the menu, for now â although its price point has been increased to $25.
Garnier described Red Lobsterâs difficulties in appealing to Inflation-hit customers increasingly mindful of costs while maintaining the companyâs overall profitability.
The CFO indicated that Red Lobster had brought in corporate consultants to aid in the long-term economic strategy of the chain.
âWe are really monitoring very closely the situation in order to improve the operation and the efficiency and the marketing of Red Lobster.â
âAnd then on the flip side, we also have the support from the advisors to see, what are we doing in the mid-term and also in the long-term with the business?â
This article appeared originally on The Western Journal.