Why Did Red Lobster Fail?
Killed by Its Own Endless Shrimp
📜 What Happened
Red Lobster's occasional '$20 Endless Shrimp' was a beloved traffic gimmick. In 2023 its owner — Thai Union, which happened to be a giant SHRIMP SUPPLIER — made it permanent. Customers treated it as a professional sport; the chain lost $11M in one quarter on the deal while its supplier-owner sold it all the shrimp. It was the final absurdity atop years of private-equity damage: a sale-leaseback had sold all the restaurants' real estate, saddling every location with rent forever. Bankruptcy filed May 2024.
☠️ The Fatal Mistake
An owner with a conflict of interest ran the menu — the promotion lost money on every plate, but the shrimp supplier got paid on every plate.
🧠 The Lesson (Free for You)
Check who profits from each decision — when your owner makes money on your costs, your losses are their revenue. And never make a loss-leader permanent: customers will optimize you into the grave.
📕 The Antidote Book
The standard formula — Sales − Expenses = Profit — is behaviorally broken: profit comes last, so there's never any (Parkinson's Law guarantees expenses grow to consume whatever's available). Michalowicz flips it: SALES…
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