As the US economy sputters under the Biden administration, rising inflation and a Biden-induced recession have meant some tough times for many businesses. restaurants, in particular, face high operating costs and cash-strapped customers searching for value. And one chain in particular, Red Lobster, is struggling to navigate these tumultuous economic waters.
The company’s all-you-can-eat “Ultimate Endless Shrimp” deal was meant to attract customers to the chain and a boost business; however, the strategy has backfired and the chain has now reported an $11.3 million loss. Ludovic Regis Henri Garnier, CFO of the chain’s parent company, explained in a conference call with corporate investors, “We wanted to boost our traffic, and it didn’t work. 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.”
Unfortunately for the seafood giant, fans of the Ultimate Shrimp deal have gobbled up enough to eat into the company’s profits. Though the deal drove a 4 percent increase in traffic, Red Lobster has had to revise the Ultimate Shrimp’s price point to $25, but that could be a tough sell to customers already stretched thin by economic woes. With the potential $20 million loss the company faces this year, it is difficult to find a way to make the chain operationally and economically sustainable.
Red Lobster's parent company reported an $11.3M operating loss last quarter "in part due to customers taking advantage of its Ultimate Endless Shrimp deal — where $20 (now $25) bought you as much shrimp as you could stomach in one sitting." ????????????????????????????????????????https://t.co/igBUnueBxC pic.twitter.com/YNGQXbPV5M
— Scott Lincicome (@scottlincicome) November 29, 2023
In the wake of this crisis, Garnier has made the decision to bring in corporate consultants to help strategize for the chain’s long-term financial success. He explained, “We are really monitoring very closely the situation in order to improve the operation and the efficiency and the marketing of Red Lobster. And 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?”
I was a big part of this, I once took a quick nap in a booth so I could keep eating more shrimp
— Hunter Dale (@hunterdale6) November 30, 2023
It seems that times are tough for chain restaurants, and it’s likely to remain that way for the foreseeable future. As Biden’s sham economy continues to hurt all businesses, it is difficult to predict how Red Lobster, or any other chain, will be able to weather this economic storm.
Alas have No Red Lobster in my area