In summer 2023, Red Lobster launched its permanent ‘Ultimate Endless Shrimp’ offer at $20, attracting TikTok creators and mukbangers who consumed exorbitant quantities of shrimp, depleting stocks and driving away regular customers. The chain recorded losses of $11 million in Q3 2023 and $12.5 million in Q4, before filing for bankruptcy in May 2024 with $692 million in total liabilities, closing roughly 130 of its 700 restaurants. Court filings reveal that a creditors’ trust is suing former owners, notably Thai seafood giant Thai Union and its partner Seafood Alliance, for allegedly orchestrating the promotion to force inflated shrimp purchases, generating at least $32 million in avoidable costs. Executive Paul Kenny, described as closely aligned with Thai Union, is accused of imposing the $20 magic price point without proper pricing analysis and redirecting shrimp supply contracts to benefit Thai Union, resulting in $16.7 million in unpaid wages and over $12 million in deferred compensation for retirees. Thai Union wrote off its entire $530 million investment, and the trial is set for early 2028.
Source: Read the original article
