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Red Lobster’s bankrupt-sea
May 23, 2024
Wall Street Journal restaurant reporter Heather Haddon discusses Red Lobster's financial woes due to a failed shrimp promotion. The episode explores challenges in casual dining, the impact of economic conditions on consumer spending, and the struggles of restaurant chains in attracting customers and staying profitable.
25:30
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Quick takeaways
- Red Lobster faced financial hardship due to an unsuccessful unlimited shrimp promo, leading to massive debt.
- Casual dining chains struggle with rising costs and changing consumer preferences, requiring innovation and adaptation to survive.
Deep dives
Red Lobster's Financial Struggles
Red Lobster finds itself in dire financial straits after a doomed unlimited shrimp promotion led to almost $300 million in debt. The company closed dozens of restaurants and was left with only $30 million in cash, insufficient to sustain its operations. The financial burden stemmed from the promotion's unexpected impact, where customers consumed more shrimp than anticipated, resulting in a significant loss.
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