Once hailed for popularizing seafood consumption, Red Lobster now teeters on the brink of bankruptcy due to missteps and managerial misjudgments, according to ABC 12.
In 2003, its "Endless Crab" promotion backfired due to a miscalculation of customer demand.
Red Lobster underestimated the number of seafood enthusiasts who would flock to its restaurants for the all-you-can-eat deal, resulting in major financial losses. Despite being a tempting offer for customers, the promotion proved unsustainable for the company, leading to a loss of $3.3 million in just seven weeks.
Two decades later, a similar blunder with a permanent shrimp deal under foreign ownership has pushed the company to the edge.
As the American seafood giant reportedly considers filing for bankruptcy protection, former leaders and analysts cite a range of factors, including mismanagement by its major shareholder, Thai Union.
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Thai Union's Mismanagement of Red Lobster
For context, Thai Union is a Bangkok-based canned seafood company that became a major shareholder of Red Lobster and played a role in the chain's decline. Thai Union's involvement included investing in Red Lobster and influencing its operations.
However, according to former employees and analysts, Thai Union's management decisions, including cost-cutting measures and menu changes driven by executive opinions rather than customer preferences, contributed to Red Lobster's struggles.
Earlier this year, VCPost reported that Red Lobster is considering selling the seafood chain restaurant as bankruptcy looms. Now that their current situation is confirmed, the seafood chain restaurant has yet to publicize the deals being made behind closed doors.
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