Why Red Lobster Was Forced To Raise Prices On Its Endless Shrimp Deal
If Red Lobster's most popular item isn't its cheddar biscuits, then the honor almost certainly goes to the Endless Shrimp deal. For a set price, diners can order as much shrimp as they can eat, prepared in the style of skewers, pasta dishes, bathed in a spicy sauce, and more. While this sounds almost too good to be true, the chain still made enough profit overall to keep the deal rolling, until recently.
Unfortunately, Red Lobster has been forced to raise the price on its Endless Shrimp deal, due to the chain greatly underestimating how much shrimp a single person can eat. With some diners consuming upwards of 100 shrimp for the same price as eating only a dozen pieces of shrimp scampi, it goes without saying that Red Lobster was losing a lot of money on the deal — as much as $11 million in one quarter alone.
Another factor is that we're living in a time of high food costs and economic instability. Just as countless buffets (and many non-buffet eateries) have raised their prices to reduce financial losses, Red Lobster changed the price of its Endless Shrimp deal in late 2023. Diners now pay $25 apiece, as compared to the original price of $20. As you can imagine, the new price had to ride a fine line between being a good enough deal to get diners in the door, while still allowing the chain to come out ahead at the end of the quarter.
Red Lobster's Endless Shrimp deal has seen other changes
Red Lobster's Endless Shrimp deal has been around since 2004, so it only makes sense that the popular promotion has gone through a few changes over time. Most obviously, the Endless Shrimp menu includes new dishes or "styles" of shrimp every year, simultaneously letting others go. Over the years, styles have included 2014's sriracha grilled shrimp, 2017's Nashville Hot shrimp, 2022's parmesan-bacon shrimp scampi, and 2024's salt and vinegar shrimp.
Aside from adding new flavors and styles of shrimp to choose from, Red Lobster took its Ultimate Endless Shrimp deal up a notch in mid-2023 by making the promotion available year-round. Prior to that year, the deal ran for only a few months each year, usually in late fall. For customers, this nice change may have eased the burn of the $5 price increase that same year. Of course, having to dole out the deal year-round made the chain's financial losses even more staggering, which is why it raised its prices to begin with.
Despite all these changes, Red Lobster lovers can rest assured that the Endless Shrimp deal is too popular for the chain to ever fully give up, and as such, the most that will change is the price we pay to stuff our faces with shrimp. However, the seafood chain has gone through some radical changes regarding its other promotions from the past.
Endless Shrimp isn't Red Lobster's first big loss
Before Red Lobster introduced its Endless Shrimp deal, the chain tried a similar promotion, which also ended in a bit of a disaster for the company. Offered only in 2003, Red Lobster's Endless Crab deal allowed diners to order as much snow crab as they could eat. However, the price of $22.99 per person only earned Red Lobster a profit on orders of two plates or less. Any orders of three plates or more (which were frequent, of course) meant the chain was running at a loss.
Even worse, the deal happened to coincide with heightened market prices at the time. Crab's wholesale price was around $5 per pound, when $3.25 was the highest price that would allow Red Lobster to make a profit. As such, the chain lost about $3.3 million on the promotion, ultimately causing its parent company to lose over $405 million in stock value and Red Lobster's president at the time to step down from her position.
Red Lobster still serves crab today, but at higher prices, and certainly not in endless amounts. A pound can cost about $30, while two pounds costs about $54. Despite the price increase, at least Red Lobster can hope to make a profit off of shrimp from now on, and not its more pricey crustacean pal.