Well, it has finally happened! I haven’t written about it yet, but I have been very aware of the situation for quite some time and my girlfriend called it 100%.

What you may already know about the Red Lobster situation is that during 4th quarter of last year I believe it was, Red Lobster as a corporation lost 11 million dollars in a single quarter, mainly because of their endless shrimp promotion becoming permanent for a short time span.

My girlfriend has been working for Red Lobster for the past two years in Oklahoma City and this morning around 8:30 she got the call that she no longer needed to report to work. Wow, the day after Mother’s Day, Red Lobster makes all the money they can off the backs of their employees and then the next morning has their poor management call and let the employees know they no longer have a job.

As of this writing, on May 13, 2024 only my Red Lobster that my girlfriend was working at is closing, but I am sure this is happening all over the U.S. this morning. I will give her specific location towards the end of the post, but for now I want to focus on the warning signs that were popping up over the past 6 months for sure.

Actually lets, go back to the real beginning of the end for Red Lobster. Most people don’t believe it, but the truth is that their endless shrimp promotion becoming permanent rather than a thirty-day promotion led to their downfall. Even before this I remember my girlfriend hating the endless shrimp promotion, but once it became permanent, I told her how it would never work and how they would lose way to much money for it to be sustainable for a long period of time.

Honestly, think about it. Shrimp isn’t exactly cheap and unless they just had a huge surplus of it their would be no way to sustain the promotion and actually turn a profit. Supposedly, they thought they could just draw customers in and I guess they thought a lot of people would order something other than the endless shrimp, but that isn’t what actually happened. What happened was basically exactly what I thought would happen.

It brought in plenty of customers, but what happened was most everyone wanted to get the endless shrimp and slowly, but surely, they started to run out of the different types of shrimp. Also, some of the restaurants started to use different types of shrimp that were probably a little more expensive, but still having to do it at the same price. The other things that happened were that some customers, not all, took advantage of the situation and would order tons and tons of the shrimp and then at the end of their meal they would want to take some to go.

Now imagine, you are a restaurant owner and you sell let’s say three shrimp skewers for maybe $15 as a regular menu item. Now let’s look at what adding a long-term endless promotion of this item without doing it properly. Let’s say you take basically this approach to creating your endless promotion which gives your customers 3 shrimp skewers to start and then as much as they can eat after that. You decide to charge $19.99 as your opening price point for the promotion because you want to draw in customers.

So you are looking at only making $4.99 more for the same amount of shrimp and after the first refill which I think came with roughly three more skewers you are now basically at a $10.01 deficit for what you would have made off of the same product if sold separately. Surely if you have any shred of common sense you would be able to see that there is no way that this is a sustainable marketing strategy because that’s basically what they tried to use it as. Now just imagine some of those tables of customers ordering multiple rounds of shrimp and losing $15 worth of potential revenue every single round after round 1.

Well needless to say, and I am sure you have seen the articles they lost the fight; the customers stuck it to them to the tune of roughly $11,000,000.00 in one Quarter or one three-month period. I say all that to say this, Red Lobster has definitely reached the beginning of the end and will probably be shutting down several of your favorite location all across the U.S. as I am writing this. Are there things that could have been done to prevent this and are there steps that could be taken even still to lessen the bleeding and potentially make Red Lobster profitable again, yeah, but I will cover that in another post.

For now, just know this, the Red Lobster on Northwest Expressway in Oklahoma City is officially closed as of I guess last night after the Mother’s Day revenue grab.

That’s all for now, I might revise and post more later, but for now this is what I can tell you.

As always, go plant some seeds and know that they will bear fruit so plant good seeds if you want good fruit.

-Founder Magbunga.com