Red Lobster was nearly crippled by all-you-can-eat shrimp. Now it’s trying endless lobster
By John Towfighi, CNN
(CNN) — Red Lobster is in trouble. Its solution: all-you-can-eat lobster, just months after an endless shrimp promotion led to deep losses that the company is still trying to dig out of.
In celebration of its annual Lobsterfest, Red Lobster is giving 150 winners an “Endless Lobster Experience,” a two-hour complimentary feast of unlimited lobster, two sides and Cheddar Bay Biscuits.
The Florida-based chain is hardly the first retailer to use these kinds of stunts to get attention. But the Endless Lobster Experience comes at a tumultuous time: Red Lobster reported a record $12.5 million operating loss in the fourth quarter of 2023.
And in January, minority investor Thai Union Group announced its intent to exit Red Lobster, citing a $19 million loss from Red Lobster across the first nine months of 2023. The Covid-19 pandemic, high interest rates, rising costs and industry headwinds ultimately caused Red Lobster to have “negative financial contributions to Thai Union and its shareholders,” said Thiraphong Chansiri, the CEO of Thai Union Group, in a January 16 statement.
On a February 19 earnings call with analysts, Thai Union Group chief financial officer Ludovic Garnier updated the $19 million figure and said Red Lobster generated $22 million in losses for Thai Union Group across the entirety of 2023.
Chansiri confirmed on the earnings call that the company is in the process of selling its stake in Red Lobster and said the process could take three to four months. “We’re not expecting to get anything much from the sale,” said Chansiri, according to a FactSet transcript of the call.
A previous all-you-can-eat deal contributed to Red Lobster’s financial woes. In June, Red Lobster announced that its “Ultimate Endless Shrimp” deal would become a permanent menu item. Despite raising the initial price from $20, to $22 and to $25 across 2023, the popularity of the item and lack of new traffic factored directly into an $11 million operating loss for Red Lobster in the third quarter of 2023.
While Thai Union looks for buyers, Red Lobster continues with Lobsterfest — an annual event started by the chain in 1984.
Starting February 20 and while supplies last, 150 winners will have a chance to enjoy Red Lobster’s free feast. But there’s a caveat: The experience includes a maximum of 12 one-and-one-fourth pound Maine lobsters. If you make it past 12, you’ll be offered Maine lobster tails or Caribbean Rock lobster tails. While the food is free, beverages, tax and gratuity are not included.
In line with tradition, the Florida-based chain is offering 10 limited-edition menu items to celebrate Lobsterfest, including five new dishes such as the Crispy Lobster & Shrimp Stack and the Lobster Lover’s Duo.
The chance to win the Endless Lobster Experience will be advertised through Red Lobster’s social media channels, including Facebook, X, Instagram and TikTok.
As Red Lobster fans wait for their chance to win a feast, Chansiri, Thai Union’s chief executive, has no plans to indulge in the delicacy of the sea.
“Other people stop eating beef,” he said on Monday’s earnings call. “I’m going to stop eating lobster.”
The-CNN-Wire
™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
