$30 prawn meal deal that destroyed iconic chain Purple Lobster

It’s the $30 all-you-can-eat prawn meal deal that has despatched an iconic chain, which had greater than 700 branches, 58,000 employees and 64 million prospects yearly, to the wall.

The house owners of US restaurant chain Purple Lobster have admitted that its “Final Countless Shrimp” menu merchandise led to gap of greater than $17 million in its backside line.

Seafood lovers throughout America had been distraught this week because it was introduced Purple Lobster had filed for Chapter 11 chapter safety simply days after it introduced it was shuttering virtually 100 shops. The corporate trying a determined survival bid to keep away from shutting fully.

“It’s sort of trash, but it surely’s additionally scrumptious,” Brit Swider, 35, from North Carolina, informed the Wall Road Journal she mentioned of her Purple Lobster craving.

“This isn’t how I normally deal with my physique,”

Based in 1968 in Florida, Purple Lobster expanded throughout the US and Canada with eating places even popping up in Japan, Thailand and Ecuador.

Clients would settle into an area that resembled a fishing hut crossed with an RSL – picket beams and cubicles – after which chow down on lemon spritzer snow crab legs, Maine lobster tails lathered in butter, creamy shrimp Alfredo pasta or crunchy garlic shrimp scampi.

No meal was full with out the well-known Cheddar Bay biscuits – heat, flaky, savoury scones that had been to Purple Lobster what cheese toast was to the now deceased Sizzler.

Extraordinary quantities of seafood funnelled their approach via Purple Lobster. It alone accounted for 20 per cent of all of the lobster tails in North America and 16 per cent of rock lobster bought worldwide.

Lobster fails

It gained over generations of People – till it didn’t, mentioned Alex Susskind, a professor of meals administration at Cornell College in New York.

“Purple Lobster was the inspiration of informal eating. They’d a place of energy and prominence and revolutionised how American shoppers eat seafood,” he informed CNN.

“Purple Lobster had unbelievable reputation amongst Child Boomers. (However) they didn’t usher in a more recent era.”

The flagship retailer is simply south of Occasions Sq. in New York Metropolis, the place you may scoff on seafood after which purchase a branded Purple Lobster T-shirt to brag about it.

Exterior the department is all neon lights and pleasure as vacationers stream by.

However contained in the restaurant, you may inform one thing is off. It’s fusty and quaint. A colorless suburban diner on the centre of the world. The chain has been starved of funding to do up branches.

The agency’s chapter submitting has proven buyer numbers are down by 30 per cent since 2019.

In 2014, Purple Lobster was bought to personal fairness agency Golden Gate Capital.

Then, from 2016, its largest seafood provider, Thailand’s Thai Union Group, began shelling out for morsels of Purple Lobster when it purchased 25 per cent of the corporate for $871 million. In 2020, it and different buyers, purchased the chain outright.

A shrimp horror story

However a disastrous choice beneath the brand new administration will eternally be remembered for the important thing function it performed in Purple Lobster’s downfall.

Final summer time, it wowed prospects with its countless shrimp deal the place for $30 ($US20) diners may have as many prawns as they wished.

Jumbo coconut, garlic scampi, crispy dragon, Alfredo or simply plain grilled – all of the prawns had been up for grabs, on a regular basis.

The chain tried one thing related in 2003 with an “countless crab” promotion. In simply three weeks, the corporate misplaced $5 million.

“It wasn’t the second serving to on all-you-can-eat, however the third” that smashed earnings, a Purple Lobster government mentioned on the time informed analysts, reported the Washington Publish.

Purple Lobster had completed prawn promotions earlier than. However, in 2023, administration managed to make the issue even worse. Countless shrimp wasn’t a one-off promotion however a everlasting menu merchandise.

For Thai Union, which farmed prawns all yr spherical, it was boon to have Purple Lobster able to take its inventory by the bucket load.

However for Purple Lobster, it was a nightmare.

Clients rushed into shops however had been spending far much less. On social media, individuals filmed challenges making an attempt to see simply what number of shrimps they might swallow in a single sitting.

As People guzzled down on countless shrimp, they stayed at tables longer. And the $20 promotion occurred simply as wholesale prawn costs started to shoot up making the deal even higher for the shoppers and even worse for Purple Lobster.


In its chapter submitting this week, Purple Lobster mentioned countless shrimp had value the chain tens of millions of {dollars} it may in poor health afford to lose.

Making the shrimp promotion everlasting was a “misstep” of a earlier CEO, it said, that was completed “regardless of important push again from different members of the corporate’s administration crew”.

“This choice created each operational and monetary points costing Purple Lobster $11 million ($A16.65 million) and saddling it with burdensome provide obligations, notably with Thai Union.

“The Debtors (Purple Lobster administration) are presently investigating the circumstances round these selections.”

This yr, Purple Lobster quietly upped the worth of Final Countless Shrimp to $25 and made it a Monday-only particular – the quietest day of the week – and even then not on public holidays.

However a preponderance of prawns was not the one downside.

Thai Union’s ‘outsized affect’

The chapter submitting alleged Thai Union had an “outsized affect” on seafood buying. “Below the guise of a ‘high quality overview,’” it said, two of the corporate’s shrimp suppliers had been ditched “leaving Thai Union with an unique deal that led to larger prices to Purple Lobster”.

“The Debtors are exploring the affect of the management Thai Union exerted … and whether or not actions taken … had been applicable and in keeping with relevant duties and obligations to Purple Lobster.”

Like all chains, it additionally had to deal with rising employees prices and value of residing considerations which has seen individuals dial again on discretionary spending. Excessive leasing value shave additionally drained its restricted money.

Michael Kaufman, a former restaurant chain government, informed the Washington Publish, countless prawns had been “the straw that broke the camel’s again”.

Final yr, Purple Lobster stopped paying some distributors as money grew to become tight. In January, Thai Union mentioned it might unload its 49 per cent stake in Purple Lobster resulting from its “extended unfavorable monetary contributions”.

Purple Lobster’s administration is insistent it will probably stay a restaurant staple and can exit chapter. In a press release, it mentioned it had acquired $150 million ($US100m) in financing from its lenders to assist it climate the storm.

“This restructuring is the perfect path ahead for Purple Lobster,” mentioned chief government Jonathan Tibus.

“It permits us to deal with a number of monetary and operational challenges and emerge stronger and refocused on our development.”

It plans to shut underperforming places after which promote itself as a going concern.

If Purple Lobster does get new house owners, they could do properly to keep away from an all-you-can-eat promotion to get bums on seats.

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