Skip to main content

How Endless Shrimp Almost Sank Red Lobster

All-you-can-eat promo backfires, draining profits and forcing closures.

  • Food & Drink
  • Inflation
  • Retail, Marketing and Advertising
  • Healthcare
  • Pricing
  • Product Development
  • Product Distribution
  • Supply & Demand
  • Chapter 1 Taking Risks & Making Profits
  • Chapter 2 Economics
  • Chapter 5 Forms of Business Ownership
  • Chapter 6 Entrepreneurship
  • Chapter 13 Marketing
  • Chapter 14 Product & Price
  • Chapter 15 Distribution
  • Chapter 16 Place & Promotion
  • Bonus Chapter B
  • Blog
  • Video
  • Understanding Business
  • Higher Education

In the late 1990s, the seafood chain Red Lobster was one of the fastest growing restaurants in the nation as it earned billions of dollars in annual revenue from more than 700 locations. As the years went by, though, poorly planned promotions and wider economic factors took their toll on the company. This video looks at how the pandemic and an endless shrimp promotion brought Red Lobster to the brink of bankruptcy.

Questions:

  1. How did Red Lobster’s endless shrimp promotion backfire on the company? 
  2. What effect did the pandemic have on operations at Red Lobster?
Author: NickelsMcHughMcHugh