Endless shrimp deal sees restaurant chain lose millions

In hopes of attracting more customers during the summer and autumn, American restaurant chain Red Lobster in June made one of its most popular specialty dishes a mainstay on the menu – Ultimate Endless Shrimp.

In the past few months, the restaurant saw an uptick in customers, who could pay US$20 (NZ$32) to eat as many shrimp as they wanted. But the offer, which Red Lobster once called “irresistible”, might have been too popular for the company’s own good.

Thai Union Group, a Thailand-based seafood supplier that owns a substantial stake in Red Lobster, said in a recent financial report that the company suffered a roughly US$11 million (NZ$17.7m) operating loss during its third quarter,

Ludovic Regis Henri Garnier, Thai Union Group’s chief financial officer, said the Ultimate Endless Shrimp deal contributed to the financial loss.

“The proportion of the people selecting this promotion was much higher compared to expectation,” Garnier said.

More customers started dining at the restaurant chain than earlier in the year, but many ordered only the Ultimate Endless Shrimp, said Thiraphong Chansiri, Thai Union Group’s chief executive.

The deal was so popular that some people on social media competed to eat the most shrimp in one sitting, or found strategies to consume as many as shrimp as possible.

Garnier said Red Lobster recently increased the price for Ultimate Endless Shrimp to US$25 (NZ$40) – a change that had improved the company’s operating costs.

This isn’t the first time Red Lobster has suffered financially from an “endless” dish promotion. In 2003, the restaurant chain lost millions of dollars after underestimating how many crabs people typically eat in one sitting.

Other restaurant companies have faced financial issues from similar promotions, including Olive Garden, which didn’t offer its never-ending pasta promotion in 2020 and 2021. Applebee’s failed to meet financial expectations in 2004 after serving allyou-can-eat riblets.