Whether we’re eating shrimp and grits, popcorn shrimp, as part of a low-country boil, or on a po’boy, topped with Old Bay or garlic butter, it’s a well-known fact that Southerners love shrimp. You might call it an endless kind of love and that turns out to be a problem for Red Lobster. The fast-casual seafood chain is reportedly eyeing Chapter 11 bankruptcy after an endless shrimp deal proved way too popular.
On a recent earnings call the Chief Financial Officer (CFO) of Red Lobster’s parent company announced that its Ultimate Endless Shrimp deal, which offered diners unlimited shrimp and a side of Red Lobster’s famous Cheddar Bay Biscuits for just $20, was a massive hit. That is a good thing, of course, but turns out it was too much of a good thing. As Good Morning America reported, the Florida-based restaurant chain reportedly is posting an operating loss of more than $11 million in the third quarter of 2023 and a further $12.5 million in losses in the fourth quarter of 2023. Those losses were due in part to folks coming in and eating as much shrimp as they could for that $20 price tag. While the offer did lure in more customers, the restaurant wasn’t making enough money on the deal. «We knew the price was cheap, but the idea was to bring more traffic in the restaurants,» CFO Ludovic Regis Henri Garnier told investors, according to Restaurant Business. «So we wanted to boost our traffic, and it didn’t work.»
Now, according to Bloomberg, the restaurant is considering filing for Chapter 11. According to Restaurant Business, the restaurant is eyeing overall losses of around $20 million. Don’t worry that Red Lobster is closing just yet, though. A Chapter 11 bankruptcy would allow the chain to stay open while dealing with its debt and help the chain re-negotiate long-term contracts and real estate.
To help shore up their finances, the company has also recognized that the $20 price tag for all-you-can-eat shrimp was far too low. So now, Red Lobster has upped the price to $25, which they hope will keep them afloat a while longer.
