Red Lobster Says Q3 Losses , Are the Result of Popular , Unlimited Shrimp Deal.
NBC reports that Red Lobster's parent
company has disclosed the company's
unexpectedly large Q3 losses. .
NBC reports that Red Lobster's parent
company has disclosed the company's
unexpectedly large Q3 losses. .
According to Thai Union Group, the losses were
the result of Red Lobster's $20 shrimp promotion,
which was more popular than anticipated.
The proportion of the people
selecting this promotion was much
higher compared to expectation, Ludovic Garnier, Chief Financial Officer at Thai Union Group, via NBC.
This year, the company changed its annual all-you-can-eat-shrimp deal from a limited-time offer to a permanent one. .
The company said the decision was meant
to boost traffic when business tends to slow
in the third and fourth quarters of the year. .
While the strategy did bring in more customers,
bolstering the company's market share, low margins
from the popular deal presented a problem.
The company responded to the
promotion's surprising popularity by raising
the price from $20 to $22 and now to $25. .
It’s one of the iconic promotions for
Red Lobster, so we want to keep it in
the menu but, of course, we we need
to be much more careful regarding
what is the entry point and
what is the price point we’re
offering for this promotion, Ludovic Garnier, Chief Financial Officer at Thai Union Group, via NBC.
Thai Union Group invested in Red Lobster in 2016 and obtained the rest of the company from Golden
Gate Capital in 2020 with a group of other investors.
In March, Bloomberg News reported that
Thai Union Group would seek to sell its stake in the
restaurant chain if performance fails to improve