This Red Lobster endless shrimp promotion was very successful.
In which Thai Union Group holds a 36% stake, Red Lobster experienced the consequences of a highly successful promotion, Ultimate Red Lobster Endless Shrimp. The promotion, offering unlimited shrimp for $20, aimed to draw more restaurant patrons, which escalated foot traffic by approximately 2% compared to the previous quarter and 4% from the prior year—especially noteworthy during a traditionally slow period for the restaurant industry.
However, the unexpectedly high promotion uptake indicated that customers primarily sought substantial value for their money. CFO Ludovic Garnier highlighted this disparity from their initial projections, stating that while the promotion drove traffic, the profit margin at the $20 price point was minimal.
Consequently, Red Lobster adjusted the price, initially raising it to $22 and subsequently to $25. Garnier emphasized the promotion’s significance to the brand’s success but underscored the necessity for a more strategic approach in setting entry and pricing points.
Despite the forecasted loss of 700 million Thai baht ($20 million) in 2023, an improvement from the previous year’s substantial loss of 1.2 billion baht, Red Lobster intends to retain the promotion on their menu, recognizing its significant appeal while also prioritizing a more measured pricing strategy to mitigate financial losses.