Food - News
What Really Happened To Red Lobster's Endless
Snow Crab Promotion?
By FELIX BEHR
Red Lobster president Edna Morris was removed from her position after launching the Endless Crab promotion, which almost drove the company to bankruptcy. For $22.99, you could eat as many snow crabs as you wanted, but this promotion overlooked two important facts.
Red Lobster’s snow crab promotion was running on slim margins, as the prices of crabs kept rising because of the stringent quotas imposed by the US government. Moreover, people are really big fans of crabs, and as CEO Joe Lee explained to the investors, “It wasn't the second helping, it was the third that hurt.”
The company lost $405.9 million in stock in a single trading session and $3.3 million in profits. Edna Morris’ attempt to apply the all-you-can-eat tactic — that she had picked up from her steakhouse background — failed for Red Lobster, but they did find success a year later when they turned it into the Endless Shrimp promotion.