Shrimp inflation is killing Red Lobster

by Rachel Baker on February 20, 2014

Things aren’t looking too good for Red Lobster’s Endless Shrimp promotion over the next couple of years.

For a chain that bills itself as an affordable place to eat seafood, high shrimp prices have been fairly disastrous. “Red Lobster has almost (been) forgotten as a place to eat by US families as they perceive the brand as not offering the most value,” Brian Sozzi, chief executive of Belus Capital Advisors told Reuters back in December.

The shrimp inflation stems from a early mortality syndrome (EMS), a bacterial disease affecting production in the three biggest shrimp-producing countries—Thailand, Vietnam and China. This, in turn, has led to a sharp contraction in shrimp supply, which has driven up prices. In percentage terms, shrimp price increases were in the “high teens” last quarter, the company said.

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