If you've noticed a hike in prices for a beloved Red Lobster special, your observations are correct. The company that owns Red Lobster has acknowledged a price increase following an operational loss of over $11 million in the recent fiscal quarter.
This past June, Red Lobster heralded the return of its much-loved Ultimate Endless Shrimp offering. Unlike previous occasions where this was a temporary feature, Red Lobster has now declared this special as a permanent fixture.
"For over 18 years, Ultimate Endless Shrimp has been a hallmark event and a favorite among our customers at Red Lobster," stated Patty Trevino, the Chief Marketing Officer of Red Lobster. "Recognizing our customers' enthusiasm for the yearly comeback of Ultimate Endless Shrimp, we've chosen to make it an everyday, all-day feature."
The Ultimate Endless Shrimp, akin to Olive Garden's Never-Ending Pasta Bowl, allows patrons to enjoy unlimited quantities of various shrimp selections, including the fan-favorites Garlic Shrimp Scampi and Shrimp Linguini Alfredo.
The reintroduction of Red Lobster's Ultimate Endless Shrimp in June was initially priced at an accessible $20. To put it in perspective, a single serving of Shrimp Linguini Alfredo is currently priced at $16 at a Red Lobster in New Jersey, making the endless option a mere $4 upgrade. Nevertheless, the Thai Union Group, Red Lobster's overseeing company, has since chosen to increase the deal's cost to $25.
Why the increase? Thai Union's CFO, Ludovic Regis Henri Garnier, attributes it to the deal's unexpectedly high demand.
Restaurant Business Magazine highlighted Garnier's remarks from a recent earnings conference, noting that the promotion's relaunch aimed to drive up patronage at Red Lobster locations. Despite a marginal rise in customer visits, the financial outcome for Red Lobster was less than favorable.
Originally, Thai Union projected a $17 million loss for 2023. However, due to the overwhelming success of the Ultimate Endless Shrimp deal, they are now bracing for a $20 million deficit, as reported by Restaurant Business Magazine. Red Lobster's third-quarter operations dipped into an $11 million loss, surpassing Thai Union's expectations, prompting a $5 increase in the deal's price.
Garnier emphasized the importance of maintaining the promotion, stating, "We are committed to keeping this offer available to our customers. However, we must approach our pricing strategy with greater caution, ensuring the right balance between accessibility and profitability."
This situation is the most recent in a series of setbacks for Red Lobster in 2023. Earlier in the year, the company was forced to shutter at least eight outlets that were no longer profitable. These closures add to the five locations closed in the U.S. in 2021 and four in 2020.
