Seafood chain Red Lobster is reportedly considering bankruptcy after their all-you-can-eat shrimp promotion contributed to a staggering $11 million loss in 2023.
The restaurant brand is looking at a Chapter 11 filing in order to “restructure its debt” after facing record losses, according to the Daily Mail.
The business’s $20 shrimp promotion came after it experienced a $5.4 million loss in the second quarter of 2023, but the deal was so popular with customers that it failed miserably at increasing profits.
Even after the company attempted to get back on course with a price increase to $25 for the endless shellfish deal, they still experienced staggering losses.
While foot traffic into the restaurants reportedly increased by 4 percent as a result of the promotion, it ended up not being worth it as many people were coming in just for the cheap shrimp.
“For those who have been in the US recently, $20 was very cheap. And the rationale for this promotion was to say we knew the price was cheap, but the idea was to bring more traffic in the restaurants,” Red Lobster CFO Ludovic Garnier said in November.
“But something which was different from our expectation is the proportion of the people selecting these promotions was much higher compared to expectation.”
Bloomberg said the popular seafood chain has not yet made its final decision on filing for bankruptcy, but that the company would be able to continue operating if it did.
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