Red Lobster faced a major setback when it filed for bankruptcy in May 2024. Central to this crisis was the chain’s ill-fated Ultimate Endless Shrimp promotion, which the company’s new CEO, Damola Adamolekun, candidly identified as a significant misstep in the restaurant’s attempt to attract customers back after the pandemic. In a recent interview, Adamolekun detailed how the all-you-can-eat shrimp strategy turned into a costly disaster and outlined his vision for revitalizing the business moving forward.
What Went Wrong with Red Lobster’s Ultimate Endless Shrimp Deal
Red Lobster’s Ultimate Endless Shrimp Deal was an all-you-can-eat promotion featuring various shrimp dishes for a set price. To enjoy the promotion, customers pay a flat fee of $20, which was eventually increased to $25. They can choose from a variety of shrimp dishes, often including both breaded and unbreaded options. They can order up to three choices at a time and reorder as much as they want throughout the meal. The deal also included one side dish and the chain’s famous Cheddar Bay Biscuits.
Launched in June 2023 as a limited-time deal, the all-you-can-eat promotion eventually became a permanent standing menu option. But since shrimp is an expensive seafood, the Ultimate Endless Shrimp Deal resulted in lower profit margins, contributing to the company’s $11 million loss that culminated in the bankruptcy filing.
“[Shrimp is a] very expensive product to give away endlessly,” Adamolekun said in a recent interview with CNN. “When you have endless shrimp, and people are coming in and sitting down at the table and eating for hours as much shrimp as they possibly can, you stress out the kitchen. You stress out the servers. You stress out the host. People can’t get a table. It creates a lot of chaos.”
In November 2023 following the termination of the all-you-can-eat promotion, Thai Union Group chief financial officer Ludovic Regis Henri Garnier acknowledged that the Ultimate Endless Shrimp Deal was a failure. “We wanted to boost our traffic, and it didn’t work,” said the CFO of Thai Union Group, Red Lobster’s Thailand-based investor, who is expected to fully divest by the end of the year.
In addition to the Endless Shrimp promotion, Thiraphong Chansiri, CEO of Thai Union Group, cited other factors that contributed to Red Lobster’s financial struggles. “The combination of the COVID-19 pandemic, sustained industry headwinds, higher interest rates, and rising material and labor costs have impacted Red Lobster, resulting in prolonged negative financial contributions to Thai Union and its shareholders,” Chansiri said in a statement in January.
New Red Lobster CEO Outlines Vision for Growth and Revitalization
Despite the closure of numerous Red Lobster locations in 2023, Adamolekun has outlined a strategic plan to grow the company. Rather than focusing on opening new restaurants, Adamolekun intends to enhance existing locations and improve the overall customer experience.
“We intend to be done closing restaurants,” said Adamolekun during his interview with CNN. “We intend to grow from here in terms of the business. There’s going to be investments in the product that will take time. Infrastructure investment takes time. Technology investment takes time.”
Currently, Red Lobster operates 545 locations. Adamolekun’s vision includes revitalizing these restaurants by addressing maintenance issues, such as repairing HVAC systems, replacing worn carpets, and upgrading seating. He believes these improvements will have a positive impact on customers immediately.
In addition, Adamolekun plans to streamline Red Lobster’s menu, recognizing that the current offerings are overly extensive. By focusing on a more curated selection, the company aims to enhance the quality and appeal of its menu items.
In a separate interview with the Wall Street Journal, Adamolekun said customers “just want quality food in a comfortable setting and to connect with the history of the brand.”
Before assuming the role of CEO, Adamolekun conducted undercover visits to Red Lobster restaurants across the country. This firsthand experience allowed him to gain valuable insights into the brand and its customers.