In June 2022, Red Lobster announced the introduction of its Ultimate Endless Shrimp promotion, offering unlimited shrimp for just $20. This move aimed to attract diners to its nearly 700 locations across the U.S.
Customers flocked to the chain, indulging in a variety of shrimp dishes, including Parrot Isle Jumbo Coconut Shrimp, Garlic Shrimp Scampi, and Shrimp Linguini Alfredo, showcasing a fervent response to the all-you-can-eat offer.
As guests recorded their shrimp-eating challenges for social media, employees braced for the demanding environment that came with the new menu item. The continuous demand during the promotion resulted in overwhelmed staff and a chaotic atmosphere.
Despite the buzz, the chain struggled to attract younger customers and experienced a significant decline in foot traffic, reporting a 30% drop in customers since 2019.
New management, brought in post-2020, implemented strict measures to revitalize the brand, which had waned in popularity. The push for Endless Shrimp heightened expectations, placing additional pressure on employees who were already stretched thin.
By January 2023, Thai Union, the parent company, decided to sever ties with Red Lobster, citing substantial financial losses and commitments that could no longer be maintained. The company noted it had invested heavily, but long-standing operational challenges persisted even before the COVID-19 pandemic.
The tumultuous history of Red Lobster traces back to its founding in 1968 by Bill Darden, with the aim of making seafood accessible to a broader audience. The chain grew rapidly, especially after its acquisition by General Mills in the 1970s. However, after several ownership changes and a series of financial missteps, including a controversial sale-leaseback of real estate, Red Lobster faced an uphill battle in maintaining profitability.
The impact of the pandemic was particularly severe for Red Lobster, as its older clientele hesitated to return to in-person dining, further exacerbating financial woes. With a focus on cutbacks and changes in management, the chain transitioned to desperate measures, including the permanent implementation of Endless Shrimp to boost sales.
As of May 2023, Red Lobster filed for bankruptcy, closing 140 restaurants and revealing debts of around $1 billion. The chain’s future remained uncertain until Fortress Investment Group emerged as the sole bidder to acquire the brand for $375 million, a stark decrease from its original valuation.
Thai Union’s CEO expressed a desire to move forward, distancing himself from the challenges associated with Red Lobster, emphasizing that the brand’s tumultuous chapter was now closed.
