Business Wars Daily The Drowning of Red Lobster
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May 29, 2024 Red Lobster faces financial strain and customer decline due to endless shrimp promotion, while Olive Garden thrives with never-ending pasta. The downfall of Red Lobster contrasted with Olive Garden's success.
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Endless Shrimp Deal
- Red Lobster's endless shrimp deal, initially a yearly promotion, became a permanent menu item.
- This change, influenced by major shareholder Thai Union, aimed to sell their surplus shrimp.
Exclusive Shrimp Supplier
- Thai Union's influence led to Red Lobster breaking ties with existing shrimp suppliers, making Thai Union the exclusive provider.
- This resulted in higher costs and burdensome supply obligations, contributing to Red Lobster's downfall.
Promotion Strategies
- Red Lobster's permanent promotion contributed to its downfall, while Olive Garden's limited-time "Never-Ending Pasta" promotion has driven sales.
- This contrast highlights the potential downsides of constant promotions versus strategic, limited-time offers.