The Rise and Fall of the Red Lobster

2023: Red Lobster expanded its Endless Shrimp into a daily promotion, but it was a disaster.

In January 2023, Restaurant Business reported that Red Lobster closed eight restaurants in the span of a few months as part of a routine review of restaurant performance. But the worst was yet to come.

Initially a one-day-a-week deal for $20, Endless Shrimp became a daily promotion in the summer of 2023 to attract more customers as Red Lobster struggled to keep up with a changing industry.

However, inflation and the rising cost of seafood have created a difficult situation for the chain. In 2023, Red Lobster increased the price of Endless Shrimp twice, eventually reaching $25 to cope with demand and improve profits.

Despite rising prices, the “all you can eat” strategy has backfired. The channel reported operating losses of $11 million and $12.5 million in the two quarters following the initial launch of the never-ending daily shrimp promotion.

In 2024, the offer is only available on Mondays.

However, Endless Shrimp isn’t the only cause of Red Lobster’s demise, Business Insider’s Emily Stewart wrote in an analysis of the chain’s struggles over the years.

Changing tastes are also a major issue.

The seafood restaurant industry faces significant challenges in the United States, Darren Tristano, CEO and founder of Foodservice Results, a food industry consulting firm, told BI.

Many customers who crave seafood are more likely to seek it out at a steakhouse rather than a specialty seafood restaurant or chain like Red Lobster.

“If anything, the Endless Shrimp deals are probably as much a symbol of desperation or mismanagement, or both,” Jonathan Maze told BI.