Shellfishness
It seems that Red Lobster has learned the true value of all-you-can-eat.
Thai Union Group, owner of the 670-location-strong chain, reported an operating loss of $11.3 million for the seafood restaurant’s latest 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.
Sea change
Clearly, Red Lobster somewhat underestimated America’s jumbo appetite for shrimp, which has been generally on the rise for decades.
Indeed, the availability of shellfish to the average American skyrocketed in the ‘90s, increasing by 80% in 8 years, before peaking at 6.3 lbs per capita in 2004. However, huge influxes of cheap shrimp into US ports in that year from countries such as China, Vietnam, Thailand, and India sparked accusations of dumping — leading to the US Commerce Department imposing steep import tariffs… and going down in history as the “shrimp wars” of 2004.
Despite the restaurant chain's promotion succeeding in contributing to traffic, which increased 4% year-over-year, the deal turned out to be a tad too generous: Red Lobster’s yearly outlook worsened to a $20m loss, after briefly clawing into profitable territory back in Q1.
