Elon Musk is mourning the loss of Red Lobster too
Elon Musk Mourns Red Lobster's Fall: Why?
Elon Musk expressed sadness over Red Lobster's bankruptcy, reminiscing about past dining experiences at the seafood chain. Red Lobster, known for its "Ultimate Endless Shrimp" promotion, filed for Chapter 11 but will keep its restaurants open. The decision to make this shrimp deal a permanent menu item led to significant financial losses, contributing to the bankruptcy amidst a challenging economic climate for the food and beverage industry.
What specific financial losses did Red Lobster report in the third and fourth quarters of 2023?
Red Lobster reported significant financial losses in the latter part of 2023, specifically due to its "Ultimate Endless Shrimp" promotion. In the third quarter of 2023, the seafood chain incurred an operating loss of $11 million. This loss was followed by an even greater shortfall in the fourth quarter, where the company reported operating losses of $12.5 million. These losses were largely attributed to the decision to make the previously limited-time shrimp offer a permanent menu item, which failed to perform financially as expected.
What changes did Red Lobster make to the price of the Endless Shrimp promotion after initially facing losses?
Red Lobster initially offered the Endless Shrimp promotion at a price of $20. However, after incurring significant losses, they increased the price of the promotion to $22 and then eventually to $25 in an attempt to mitigate the financial impact. Despite these price adjustments, the promotion continued to negatively affect the company's financial performance, ultimately contributing to their decision to file for bankruptcy.