Red Lobster says unlimited shrimp promotion was too popular and too cheap
Red Lobster says unlimited shrimp promotion was too popular and too cheap
The casual restaurant chain's corporate parent says a $20 all-you-can-eat shrimp deal contributed to bigger losses for the company.
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Company surprised that loss leading promotion lead to losses.
Details at 11.
Yes, it's surprising when a loss leader leads to losses. For example, Olive Garden and their soup, salad, and bread sticks are probably loss leaders because of how cheap they are, but they make up that little loss with much better margins on entrees (and, I assume, drinks).
i hate how the term 'loss leader' is bandied about like i'm meant to feel sorry for them so generously losing money on something when at the end of the night it's obviously one transaction for everything with a healthy amount of profits baked in
What else should it be called? I don’t think there’s some moral responsibility placed upon the patron to make up for the loss, even with that name. It’s a gamble for the business that is usually thought out and is intended to lead to an increase in profits overall due to margins baked into items that aren’t on promo.
Sure, it’s considered poor taste to come to a restaurant solely for the free bread and some water and then leave, but it’s completely fair game to take advantage of a loss leading promotion like “endless shrimp” or Costco’s $1.75 for a hot dog and soda. The loss leader gets you in the door. They have other strategies to make that loss worth their while. If you walk in and pound more shrimp than Red Lobster can cover with the margins on the rest of your ticket, that’s their fault not yours… the house lost that bet.
$1.50, and the CEO will kill you if you try to raise it.
I heard they have monthly death matches in the garden section after midnight
like i'm meant to feel sorry for them so generously losing money on something
But think of the shareholders and CEO. Won't someone please think of the shareholders and CEO?!
It's not meant to make you feel sorry for them and in fact it's an illegal tactic in many places
What places are those?
Belgium. You are not allowed to sell any item at a loss. Fire example Ikea had to increase the prices of its restaurant and a supermarket that did a 3 for 1 promo got in trouble.
Soup might not actually be a loss leader. Their soups are pretty cheap to make in bulk- especially if they’re using left over ingredients that are not quite as fresh.
I'm sure they're fresh, darden(who used to own red lobster) likely doesn't get too granular with it's produce suppliers in the area. They'll make one contract for all their subsidiary restaurants I'm sure.
I doubt red lobster seafood is fresh (lobster are from the tank, the rest not so much). It’s frozen. (They’d have to fly it in special, for most of their locations. Which. Is not cheap.)
Their soups… I dunno 50/50 on them being warmed out of giant bags made in some distribution hub.
Their biscuits are made from a dry mix (probably identical to bisquick)
I was speaking to OG’s soups (which are made fresh- during prep that morning.) are pretty freaking cheap to make- especially since they probably use all the not-quite as fresh ingredients left over from the previous night; and stocks made from bits and pieces that would otherwise be tossed (like chicken carcass or skins/peels from carrots and onions).
Their biscuits are made from a dry mix (probably identical to bisquick)
Where an I obtain massive quantities of this dry mix?
Asking for a friend.
They sell it at grocery stores. They even have a gluten free version that my wife actually prefers to the regular.
Of course, then I have to make it myself...
Walmart bulk foods aisle
Are we talking Bisquick or delicious Red Lobster Cheddar Biscuits here? Because there's a difference.
That's what I was taking about. I was taking about darden getting fresh produce. They're who own olive garden. They just also used to own red lobster but got rid of it.
There’s levels of freshness, so to speak.
Soups usually get things that are not-as-fresh because they get simmered all day anyway- no one is gonna notice if the the carrots were getting flacid or if the protein is dried out from being cooked and not served.
They make the soup fresh daily- just in the morning. and they keep it hot so as to get it out quickly. The ingredients they use, though “fresh” are not the freshest in their pantry, if that makes sense. It’s the left over trimmings that get chopped up so as to hide it (this is actually a good thing. It reduces waste.)
Yeah, loss leader probably isn't the right term for those.