16462: Red Lobster + Cheap Shrimp = Disaster At Sea.

 

Business Insider reported on the Red Lobster Ultimate Endless Shrimp promotion that ultimately put the restaurant chain in the red with endless profit drops that were not shrimpy. Red Lobster owner Thai Union Group didn’t put a specific figure on the revenue-gouging event, only saying that it contributed to 3Q 2023 losses of $11 million.

 

Next scheduled promotion: The Red Dumpster Fire Sale.

 

Red Lobster’s $20 promotion backfired, signaling how desperate diners are for cheap deals

 

By Nancy Luna

 

Americans are hungry for cheap deals. Red Lobster learned that the hard way.

 

In its latest quarter, profits tanked due to an overwhelming response to the chain’s $20 Ultimate Endless Shrimp deal.

 

Too many people took advantage of the low-margin offer, and it was “one of the key reasons for the losses we generated in Q3 2023,” Ludovic Garnier, the global chief financial officer of the chain’s owner, Thai Union Group, told investors during its November earnings call.

 

The chain rolled out the $20 all-you-can-eat shrimp promotion to increase the number of visits to its restaurant. Red Lobster had previously offered the long-standing promotion once a week. The chain tweaked it this year by offering the promotion every day.

 

Its generosity backfired because the chain underestimated the number of diners hunting for dining deals amid a spate of rising menu prices.

 

They anticipated the promotion would give them a 20% boost in traffic. Instead, they got a 40% boost.

 

Though inflation is slowing, menu prices remain on the uptick, according to new federal data released in November. The Bureau of Labor Statistics reported that restaurant prices, or food away from home, increased by 5.4% in October year-over-year. Fast-food prices are rising even more, up by 6.2% over the past 12 months.

 

Garnier said the promotion “clearly shows” that US diners are looking for value.

 

“For those who have been in the US recently, $20 was very cheap,” he said.

 

Ultimately, $20 for endless shrimp was too cheap for Red Lobster.

 

“We don’t earn a lot of money at $20,” Garnier said.

 

That hurt the company’s bottom line. “It did not deliver what we were expecting.”

 

But instead of scrapping the new promotion, the chain gradually raised its price from $20 to $22. It's now at $25.

 

“We do believe it’s a very strong promotion,” Garnier said. “It’s one of the iconic promotions for Red Lobster. So we want to keep it on the menu.”

13068: Red Lobster Red-Faced…?

Inc. published a peculiar perspective titled, “Béyoncé Hands Red Lobster the Marketing Opportunity of a Lifetime”—with subhead copy that read, “And then Red Lobster fumbles it. What we can learn about the importance of having a diverse work force from this social media fail.” The author, Amy Vernon, sports a “social media consultant” handle, which always warrants eye-rolling suspicion. Vernon opines that Red Lobster missed a chance to shine via social media when Béyoncé’s Super Bowl performance included song lyrics referencing the restaurant chain. Why, Red Lobster should have jumped on the opportunity like Oreo’s Super Bowl tweet during a power outage or Arby’s Grammys tweet about Pharrell Williams’ hat. The social media consultant pushed the argument further, declaring Red Lobster’s flop was rooted in its social media team’s lack of diversity. Now, MultiCultClassics can appreciate a decent speech on the imperative for inclusive workforces; however, Vernon seems to have fumbled herself in this scenario. Why do social media wonks believe real-time commentary is such a big deal? There are far more instances of advertisers pulling the tweet trigger too quickly—with disastrous results—versus typing Twitter treasures. It’s also silly to think Red Lobster could excel in social media when its traditional advertising is consistently lame. (Besides, the seafood seller saw sales spike from Béyoncé’s song after all.) But to declare the alleged blunder underscores the need for diversity is a stretch. Indeed, Vernon’s soapbox rant only garnered two comments—and the second comment was Vernon’s thank-you reply to the first comment. The revolution will not be televised. Or tweeted.

11946: Red Lobster’s Endless Shit.

Advertising Age reported Red Lobster chose Publicis Kaplan Thaler as its new “creative” shop. Red Lobster Senior VP-Marketing Mark Gilley claimed the decision was based in part on the work PKT has done for Wendy’s that “broke conventions”—but completely failed to brake sales skids. Why doesn’t Red Lobster simply ‘fess up and admit it doesn’t give a shit about creative? Endless account reviews ultimately lead to Endless Shrimp promotions.

Red Lobster Names Publicis Kaplan Thaler Creative Agency

Marketing Chief Says Shop’s ‘Convention Breaking’ Wendy’s Work Was Factor in Decision

By Maureen Morrison

Red Lobster has named Publicis Kaplan Thaler its lead creative agency.

The move comes two months after the chain put its account into review, a move that was prompted by Red Lobster’s impending departure from parent company Darden. WPP’s Grey had handled the business since 2010, when it won the account from Richards Group.

Grey, which created the chain’s “Sea Food Differently” tagline, did not participate in the latest go-round, but the agency still fields creative for Darden sibling brands Olive Garden and LongHorn Steakhouse. SMG’s Spark handles Red Lobster’s media.

The review, which began in April, had been whittled down to a contest among four shops: Interpublic’s Martin Agency, and indie agencies Olson and Barkley. Pile & Co. oversaw the process.

Mark Gilley, senior VP-marketing at Red Lobster, noted that the chain chose Publicis Kaplan Thaler because of its creative pitches, its existing work and digital and social strategy, the last of which is an particularly important element for Red Lobster as it moves more marketing dollars into digital. He added that the agency’s work for Wendy’s and its use of spokeswoman Red helped Red Lobster choose Publicis Kaplan Thaler because that tactic “broke conventions” in the fast-food category.

Mr. Gilley said that the chain has been pleased with the current “Sea Food Differently” tagline, though he said it’s not certain whether the line will remain with Publicis Kaplan Thaler. He expects the first campaign from the new shop to debut later in the first half of 2015.

Darden said U.S. same-restaurant sales in the most recent quarter increased 2.4% at LongHorn Steakhouse, declined 3.5% at Olive Garden and slid 5.6% at Red Lobster. Red Lobster’s U.S. systemwide sales were down 3.1% to $2.4 billion in 2013, according to Technomic, which ranks the chain as the 26th largest in the country.

Darden in December said it planned to sell or spin off the struggling Red Lobster brand, responding to pressure from an activist hedge fund trying to boost the stock price. In May, the chain announced it would sell Red Lobster to private-equity firm Golden Gate Capital for $2.1 billion.

It’s unclear what Golden Gate Capital has in mind for Red Lobster. But before the sale was announced in December, Darden CEO Clarence Otis said that marketing spending for the chain would decrease, because as a percentage of sales, “it’s floated up higher than is sustainable, and that’s going to be a key focus area for the new Red Lobster going forward.”

Mr. Otis said then that as the company ramps up digital-marketing capabilities for its brands, “we would expect our television marketing expenses to scale down dramatically.”

Red Lobster is the 114th biggest brand in terms of U.S. spending, according to Ad Age’s DataCenter. In 2013, the chain spent $156.2 million in U.S. measured media, down from $159.6 million in 2012.

11821: Red Lobster In The Red.

Adweek reported Red Lobster’s creative business is up for review. First of all, “Red Lobster” and “creative” should never appear together in the same sentence—unless it’s to state that the seafood chain utterly lacks creativity. Secondly, it’s a safe bet that the winning agency will be Whiter than whitefish.

Red Lobster Reviews Its Creative Business

Annual media spending exceeds $156 million

By Noreen O'Leary

Red Lobster has launched a review of its creative business, which Grey has handled since 2010.

The restaurant chain's media spending exceeded $156 million last year, down slightly from about $160 million in 2012 according to Kantar Media.

Red Lobster owner Darden Restaurants, under scrutiny by activist shareholders, has said it is considering a spinoff or sale of the struggling seafood chain. A rep at Red Lobster confirmed the creative review and explained: "The search is happening because of Red Lobster’s upcoming separation from Darden."

Last month as the Orlando company reported third quarter earnings, it said same-restaurant sales at Red Lobster declined 8.8 percent from the year-earlier period. Late last year Darden CEO Clarence Otis told investors the company will continue to cut marketing costs because of those declining sales.

Pile + Co. is managing the agency search process, as it did four years ago when the New York office of Grey won the account from The Richards Group, then the incumbent of six years.

Grey, which launched the tagline, “Sea Food Differently,” is not defending, according to sources. The WPP Group agency also handles lead creative responsibilities for two other Darden restaurants: The Olive Garden and LongHorn Steakhouse.

Grey declined to comment, referring calls to the Orlando-based chain, which could not immediately be reached.

10914: Sí Food Differently…?

This Latino Red Lobster commercial from Wing—Grey’s Latino division—perfectly complements the White campaign. That is, it all stinks like rotten fish. Not sure a waitress would really say, “I love the energy that my clients bring to the restaurant!” A hackneyed copywriter, maybe.

9282: Taco Bell Flatbread Flatulence.

KFC has Certified Cooks, Red Lobster boasts Grill Masters and Popeyes is home to Annie the Chicken Queen. Not sure what the fuck this Taco Bell character is supposed to be. Love the disclaimer that reads, “Professional. Do Not Attempt.” Professional what? Circus juggler?

9090: Spatulas As Scepters.

How come fast food joints always feature minorities to depict Grill Masters, Certified Cooks and Chicken Queens? Is it rooted in Pancake Czars, Cream of Wheat Emperors and Rice Rulers?

7862: Another Fishy Agency Review.

Adweek reported Red Lobster has narrowed its search to two White advertising agencies. Technically, one of the agencies is Grey. But in the end, the Red, White and Grey scenario lacks color.

2 Remain in Pitch for Red Lobster
The seafood chain spends more than $115 mil. annually in measured media

By Andrew McMains

Red Lobster has narrowed the field to two agencies in its review of creative and media planning duties on its advertising account, sources said.

Sources identified the shops as WPP Group’s Grey and Publicis Groupe’s Saatchi & Saatchi, both in New York. Red Lobster executives will now meet once more with each before selecting a winner, said sources.

Four agencies made presentations to Red Lobster last week and had expected a decision—not a cut—this week. Sources previously identified the other finalists as Interpublic Group’s Draftfcb in Chicago and WPP’s Ogilvy & Mather in New York.

Red Lobster’s major media spending totaled more than $115 million last year, roughly the same as in 2008, according to Nielsen. Those figures don’t include online spending.

Grey and Saatchi declined to comment, and a client representative had no immediate comment. But sources said that Red Lobster notified the agencies of the cut today.

Last week’s pitches took place at the client’s headquarters in Orlando, Fla. Saatchi presented on Aug. 2, and Ogilvy, Grey and Draftfcb on Aug. 3, according to sources. Pile + Co in Boston is managing the process.

The winner will succeed independent The Richards Group in Dallas, which did not defend. Richards had handled the business since 2004.

Media buying duties are not in play and remain at Publicis Groupe’s Zenith Media in New York.

Red Lobster is a unit of Darden Restaurants, whose other chains include Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze and Seasons 52.