Forbes on Nostr: What We Can Learn From Red Lobster's Closures And Looming Bankruptcy ========== Red ...
What We Can Learn From Red Lobster's Closures And Looming Bankruptcy
==========
Red Lobster's nationwide closures and potential bankruptcy highlight the pitfalls of their all-you-can-eat shrimp offer, which boosted traffic but hurt profits. The reasons for this failure include a big success and a big miscalculation. Red Lobster took a popular all-you-can-eat shrimp promotion used to boost Monday traffic and rolled it out every day. While Red Lobster was buying traffic with its Ultimate Endless Shrimp special, the chain found more customers ordered this dish than expected, cannibalizing sales as existing customers gobbled up the discount. Margins came under pressure as costs rose and the discount damaged profit margins. Red Lobster also faced challenges from market competition, cost pressures, and a growing appetite for plant-based foods. Thai Union, the company that owns Red Lobster, sought to exit its minority investment in the restaurant chain due to financial difficulties. Red Lobster's management has been changed repeatedly as the company sought a solution. The case underscores the broader industry challenges such as rising costs and the need for adaptability to consumer trends. Red Lobster's story may become a lesson taught in business school classes about the risks of promotions and the importance of minding profit margins.
#RedLobster #Bankruptcy #RestaurantIndustry #Promotions #ProfitMargins
https://www.forbes.com/sites/louisbiscotti/2024/05/15/what-we-can-learn-from-red-lobsters-closures-and-looming-bankruptcy/
==========
Red Lobster's nationwide closures and potential bankruptcy highlight the pitfalls of their all-you-can-eat shrimp offer, which boosted traffic but hurt profits. The reasons for this failure include a big success and a big miscalculation. Red Lobster took a popular all-you-can-eat shrimp promotion used to boost Monday traffic and rolled it out every day. While Red Lobster was buying traffic with its Ultimate Endless Shrimp special, the chain found more customers ordered this dish than expected, cannibalizing sales as existing customers gobbled up the discount. Margins came under pressure as costs rose and the discount damaged profit margins. Red Lobster also faced challenges from market competition, cost pressures, and a growing appetite for plant-based foods. Thai Union, the company that owns Red Lobster, sought to exit its minority investment in the restaurant chain due to financial difficulties. Red Lobster's management has been changed repeatedly as the company sought a solution. The case underscores the broader industry challenges such as rising costs and the need for adaptability to consumer trends. Red Lobster's story may become a lesson taught in business school classes about the risks of promotions and the importance of minding profit margins.
#RedLobster #Bankruptcy #RestaurantIndustry #Promotions #ProfitMargins
https://www.forbes.com/sites/louisbiscotti/2024/05/15/what-we-can-learn-from-red-lobsters-closures-and-looming-bankruptcy/