Guarantees of limitless or infinite something at a sequence restaurant might seem to be a superb deal to prospects.
However for eating places, possibly not.
For seafood chain Pink Lobster, the limitless enterprise truly value the corporate hundreds of thousands as a result of it was too standard.
For greater than 18 years, Pink Lobster has provided its well-known “Countless Shrimp” deal – for $20, diners can eat as many various types of shrimp as they need for a restricted time, yearly.
Associated: Pink Lobster CEO Resigns After Simply 8 Months
This 12 months, the chain (which is owned by its guardian firm, Thai Union Group) determined to make the promotion a fundamental menu merchandise and provide the deal all day, day-after-day, whatever the month or date.
The consequence? A revenue lack of almost $11 million within the third quarter of 2023.
“We knew the worth was low-cost. However the thought was to extend restaurant visitors,” Thai Union CFO Ludovic Garnier mentioned in an earnings name.
The plan was to extend visitors throughout Q3 and This fall, which was up 4% year-over-year, however income fell as most prospects who got here in to eat selected the cheaper providing.
“One thing that was completely different from our expectations was that the proportion of people that selected this promotion was a lot increased than anticipated,” Garnier mentioned. “It is one of many iconic promotions for Pink Lobster, so we need to hold it on the menu, however in fact now we have to be rather more cautious about what the entry level is and what the worth level is that we’re providing this promotion.”
Associated: Pink Lobster Accused of False Promoting in Lawsuit: Report
Notice that the worth of the limitless job has been raised from $20 to $22 and is now being provided for $25.
Garnier cited the promotion as a “key cause” for Pink Lobster’s internet loss within the third quarter and the corporate now estimates a lack of $20 million for 2023.
Thai Union Group is down simply over 14% year-over-year.