Red Lobster Endless Shrimp Debt

Red Lobster Endless Shrimp Debt

There was a lot of news recently that the restaurant Red Lobster has been incurring millions of dollars in debt ever since they decided to introduce its endless shrimp promotion permanently. For about $20 a person they could essentially eat all the shrimp they want which is a great deal. Usually for these types of offers it is priced in a way where most people simply can’t eat enough to match the price of the meal. But when it’s just shrimp and not a lot of other filling items like bread and rice I guess you can see how many can eat a lot. They even bumped up the price to $25 but that didn’t help.

But another reason why this was hurting the company financially is how with this apparently it changed the type of customers the restaurant would normally attract as well. For example, people who would usually dine in for some expensive seafood dishes with sides were now largely frugal minded diners that wanted to get the most for their dollar. Imagine changing your customer base from higher dining customers to now people who are looking for fast food restaurant value.

For this type of business it probably does make more sense to have these specials temporarily for the year. But apparently their thought was this would be great in attracting more people during the less busy seasons. Attracting the right type of customers is more important I many ways too huh?

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