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Red Lobster offered customers all-you-can-eat shrimp. That was a mistake

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Red Lobster offered customers all-you-can-eat shrimp.  That was a mistake

Red Lobster promised customers an endless supply of shrimp for $20 — a gamble the struggling restaurant chain hoped would help pull it out of its pandemic doldrums.

But Americans, and their appetites, had other plans.

The beloved yet beleaguered pillar of casual dining abruptly shuttered dozens of locations this week, heightening speculation that the chain is careening toward bankruptcy.

Although its dire financial situation isn’t the result of a single misstep, executives at the company that owns a large stake in the chain, as well as industry experts, said that miscalculations over the popularity of the all-you-can-eat shrimp special accelerated the company’s downward spiral.

The closures, including at least five locations in California, were announced in a LinkedIn post Monday by Neal Sherman, the chief executive of a liquidation firm called TAGeX Brands, which is auctioning off surplus restaurant equipment from the shuttered locations.

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Representatives for Red Lobster did not respond to a request for comment about the closures, which were listed on its website as temporary, or whether it planned to file for bankruptcy.

But company executives have been vocal about the misguided gamble with shrimp and how they misjudged just how hungry Americans would be for a deal on the crustaceans.

In an effort to boost foot traffic and ease the sales slump that swept through the restaurant industry during the pandemic, Red Lobster executives last year decided to relaunch a popular marketing ploy from years past to lure customers: For $20 they could eat as much shrimp as they wanted.

Eager for a deal during an era of stubbornly high inflation, many consumers eagerly embraced the offer as a challenge. People took to TikTok to brag about how many of the pink morsels they could put down in a single sitting — one woman boasted she’d consumed 108 shrimp over the course of a 4-hour meal.

“In the current environment, consumers are looking to find value and stretch budgets where they can,” said Jim Salera, a research analyst at Stephens, who tracks the restaurant industry. “At $20, it’s very possible for a consumer to eat well past the very thin profit margin.”

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During a presentation about sales from the third quarter of last year, Ludovic Garnier, the chief financial officer of Thai Union Group, a seafood conglomerate that has been Red Lobster’s largest shareholder since 2020, cited the endless shrimp deal as a key reason the chain had an operating loss of about $11 million during that time frame.

“The price point was $20,” Garnier said.

He paused.

“Twenty dollars,” he repeated with a tinge of regret in his voice. “And you can eat as much as you want.”

Although the promotion boosted traffic by a few percentage points, Garnier said, the number of people taking advantage of the all-you-can-eat offer far exceeded the company’s projections. In response, they adjusted the price to $22 and then $25.

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All-you-can-eat offers can be effective marketing strategies to get people in the door in the competitive world of casual dining — Applebee’s offers $1 margaritas dubbed the Dollarita, buffet chains such as Golden Corral and Sizzler promise abundance at a flat rate, and Olive Garden, one of Red Lobster’s main competitors, has long lured customers with unlimited salad and bread sticks.

But Red Lobster made a few crucial missteps with the shrimp deal, said Eric Chiang, an economics professor at University of Nevada, Las Vegas, and a self-proclaimed buffet aficionado.

The company not only started with a low price point, but offered a prized and pricey menu item that can serve as an entire meal — not many customers at Olive Garden, he noted, are going to stock up on bread sticks and salad alone.

“Most people will also order the Taste of Italy,” he said, “or something that gives you meat and pasta.”

Chiang said the most effective loss leaders, a term for products that aren’t profitable but bring in enough new customers or lead to the sale of enough other items to make the offer worthwhile, use cheap ingredients. A good example is 7-Eleven’s Free Slurpee Day, he said, as the company gives away about 15 cents of ice and syrup to customers who then pay to fill up their gas tanks.

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Consumers are especially drawn to all-you-can-eat deals and buffets during tighter economic times, Chiang said.

“This is a story of inflation,” he said. “All you can eat for $15? That gives customers a sense of control. Like we’re not being gouged, not being nickel and dimed for every dessert.”

Red Lobster, it turns out, has been in trouble for a while.

In 2003, the chain, which at the time was owned by Darden Restaurants, the company that owns Olive Garden, offered a similarly disastrous all-you-eat crab special for around $23.

So many people came back for seconds, thirds and even fourths, executives said at the time, that it cut into profit margins. Before long, the company’s then-president stepped down.

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In 2014, after a period of disappointing sales and less foot traffic, Darden sold Red Lobster to San Francisco private equity firm Golden Gate Capital for more than $2 billion, a stake that was eventually taken over by Thai Union.

Despite the turmoil, the company, which until this week touted about 700 locations, remained a brand so beloved that it earned a reference in Beyonce’s song “Formation,” in which she describes post-coital trips to Red Lobster.

After the song’s release, the company said it saw a 33% jump in sales, but that glow was short lived and had faded long before the ill-fated shrimp deal was brought back last year.

“You have to be pretty close to the edge for one promotion to tip you over the edge,” said Sara Senatore, a senior analyst at Bank of America, who follows the restaurant industry.

In January, Thai Union Group — citing a combination of financial struggles it pinned to the pandemic, high labor and material costs and the oft-cited buzzword of industry “headwinds” — announced plans to dump its stake in the company, which was founded in 1968 in Lakeland, Fla. The closures this week hit at least five California locations — Redding, Rohnert Park, Sacramento, San Diego and Torrance — according to the website of the liquidation company, which posted images of available items, including a lobster tank, seating booths, refrigerators and a coffee maker.

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During a presentation to investors in February, Thiraphong Chansiri, the chief executive of Thai Union, expressed frustration with the situation surrounding Red Lobster, saying it had left a “big scar” on him.

“Other people stop eating beef,” he said. “I’m going to stop eating lobster.”

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In-N-Out Burger outlets in Southern California hit by counterfeit bill scam

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In-N-Out Burger outlets in Southern California hit by counterfeit bill scam

Two people allegedly used $100 counterfeit bills at dozens of In-N-Out Burger restaurants in Southern California in a wide-reaching scam.

Glendale Police officials said in a statement Friday that 26-year-old Tatiyanna Foster of Long Beach was taken into custody last month. Another suspect, 24-year-old Auriona Lewis, also of Long Beach, was arrested in October.

Police released images of $100 bills used to purchase a $2.53 order of fries and a $5.93 order of a Flying Dutchman.

The Los Angeles County District Attorney’s Office charged Lewis with felony counterfeiting and grand theft in November.

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Elizabeth Megan Lashley-Haynes, Lewis’s public defender, didn’t immediately respond to a request for comment.

Glendale police said that Lewis was arrested in Palmdale in an operation involving the U.S. Marshals Task Force. Foster is expected in court later this month, officials said.

”Lewis was found to be in possession of counterfeit bills matching those used in the Glendale incident, along with numerous gift cards and transaction receipts believed to be connected to similar fraudulent activity,” according to a police statement.

A representative for In-N-Out Burger told KTLA-TV that restaurants in Riverside, San Bernardino and San Diego counties were also targeted by the alleged scam.

“Their dedication and expertise resulted in the identification and apprehension of the suspects, helping to protect our business and our communities,” In-N-Out’s Chief Operations Officer Denny Warnick said. “We greatly value the support of law enforcement and appreciate the vital role they play in making our communities stronger and safer places to live.”

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The company, opened in 1948 in Baldwin Park, has restaurants in nine states.

An Oakland location closed in 2024, with the owner blaming crime and slow police response times.

Company chief executive Lynsi Snyder announced last year that she planned to relocate her family to Tennessee, although the burger chain’s headquarters will remain in California.

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Newsom’s budget includes $200 million to make up for Trump’s canceled EV rebates, among other climate items

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Newsom’s budget includes 0 million to make up for Trump’s canceled EV rebates, among other climate items

Gov. Gavin Newsom on Friday doubled down on California’s commitment to electric vehicles with proposed rebates intended to backfill federal tax credits canceled by the Trump administration.

The plan would allocate $200 million in one-time special funds for a new point-of-sale incentive program for light-duty zero-emissions vehicles. It was part of a sweeping $348.9-billion state budget proposal released Friday, which also included items to address air pollution and worsening wildfires, amid a projected $3-billion state deficit.

EVs have become a flashpoint in California’s battle against the Trump administration, which moved last year to repeal the state’s long-held authority to set strict tailpipe emission standards and eventually ban the sale of new gas powered cars.

Last year, Trump ended federal tax credits of up to $7,500 for EV customers that were part of President Biden’s 2022 Inflation Reduction Act. In September, his administration also let lapse federal authorization for California’s Clean Air Vehicle decal program, which allowed solo EV drivers to use carpool lanes.

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“Despite federal interference, the governor maintains his commitment to protecting public health and achieving California’s world leading climate agenda,” Lindsay Buckley, spokesperson for the California Air Resources Board, said in an email. “This incentive program will help continue the state’s ZEV momentum, especially with the federal administration eliminating the federal EV tax credit and carpool lane access.”

Newsom had previously flip-flopped on this idea, first vowing to restore a state program that provided up to $7,500 to buy clean cars and then walking it back in September. That same month, a group of five automakers including Honda, Rivian, Hyundai, Volkswagen and Audi wrote a letter urging Newsom and state legislators to establish a $5,000 EV tax rebate to replace the lost federal incentives, Politico reported.

During his State of the State speech Thursday — one year after the devastating Palisades and Eaton fires in Los Angeles — Newsom said California “refuse[s] to be bystanders” while China and other nations take the lead on electric vehicles and the clean energy transition. He touted the state’s investments in solar, hydrogen, wind and nuclear power, as well as its recent move away from the use of any coal-fired power.

“We must continue our prudent fiscal management, funding our reserves, and continuing the investments Californians rely on, from education to public safety, all while preparing for Trump’s volatility outside our control,” the governor said in a statement. “This is what responsible governance looks like.”

Several environmental groups had been urging Newsom to invest more in clean air and clean vehicle programs, which they say are critical to the state’s ambitious goals for human health and the environment. Transportation is the largest source of climate and air pollution in California and is responsible for more than a third of global warming emissions, said Daniel Barad, Western states policy manager with the nonprofit Union of Concerned Scientists.

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“As federal attacks threaten California’s authority to protect public health, incentives are more essential than ever to scale up clean cars and trucks,” Barad said. “The governor and legislative leaders must act now to fully fund zero-emission transportation and pursue new revenue to grow and sustain climate investments.”

Katelyn Roedner Sutter, California senior director with the nonprofit Environmental Defense Fund, called it “an essential step to save money for Californians, cut harmful pollution, spur innovation, and support the global competitiveness of our auto industry.”

While the budget proposal does not include significant new spending proposals, it contains other line items relating to climate and the environment. Among them are plans to continue implementing Proposition 4, the $10-billion climate bond approved by voters in 2024 for programs geared toward wildfire resilience, safe drinking water, flood management, extreme heat mitigation and other similar efforts.

Among $2.1 billion in climate bond investments proposed this year are $58 million for wildfire prevention and hazardous fuels reduction projects in vulnerable communities, and nearly $20 million to assist homeowners with defensible space to prevent fire. Water-related investments include $232 million for flood control projects and nearly $70 million to support repairs to existing or new water conveyance projects.

The proposal also lays out how to spend money from California’s signature cap-and-trade program, which sets limits on greenhouse gas emissions and allows large polluters to buy and sell unused emission allowances at quarterly auctions. State lawmakers last year voted to extend the program through 2045 and rename it cap-and-invest.

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The spending plan includes a new tiered structure for cap-and-invest that first funds statutory obligations such as manufacturing tax exemptions, followed by $1 billion for the high speed rail project, $750 million to support the California Department of Forestry and Fire Protection, and finally secondary program funding such as affordable housing and low-carbon transit options.

But while some groups applauded the budget’s broad handling of climate issues, others criticized it for leaning too heavily on volatile funding sources for environmental priorities, such as special funds and one-time allocations.

The Sierra Club called the EV incentive program a crucial investment but said too many other items were left with “patchwork strategies that make long-term planning harder.”

“Just yesterday, the Governor acknowledged in his State of the State address that the climate risk is a financial risk. That is exactly why California needs climate investments that are stable and ongoing,” said Sierra Club director Miguel Miguel.

California Environmental Voters, meanwhile, stressed that the state should continue to work toward legislation that would hold oil and gas companies liable for damages caused by their emissions — a plan known as “Make Polluters Pay” that stalled last year amid fierce lobbying and industry pressure.

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“Instead of asking families to absorb the costs, the Legislature must look seriously at holding polluters accountable for the harm they’ve caused,” said Shannon Olivieri Hovis, California Environmental Voters’ chief strategy officer.

Sarah Swig, Newsom’s senior advisor for climate, noted that the state’s budget plan came just days after Trump withdrew the United States from the United Nations Framework Convention on Climate Change, a major global treaty signed by nearly 200 countries with the aim of addressing global warming through coordinated international action.

“California is not slowing down on climate at a time when we continue to see attack after attack from the federal government, including as recently as this week with the Trump administration’s withdrawal from the UNFCCC,” Swig told reporters Friday. “California’s leadership has never mattered more.”

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Abandoned shops and missing customers: Fire-scarred businesses are still stuck in the aftermath

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Abandoned shops and missing customers: Fire-scarred businesses are still stuck in the aftermath

The charred remains of the historic Pacific Palisades Business Block cast a shadow over a once-bustling shopping district along West Sunset Boulevard.

Empty lots littered with debris and ash line the street where houses and small businesses once stood. A year since the Palisades fire roared through the neighborhood, only a handful of businesses have reopened.

The Starbucks, Bank of America, and other businesses that used to operate in the century-old Business Block are gone. All that remains of the Spanish Colonial Revival building are some arches surrounding what used to be a busy retail space. The burned-out, rusty remnants of a walk-in vault squat in the center of the structure.

Nearby, the Shade Store, the Free-est clothing store, Skin Local spa, a Hastens mattress store, Sweet Laurel Bakery and the Hydration Room are among the many stores still shuttered. Local barbershop Gornik & Drucker doesn’t know if it can reopen.

“We have been going back and forth on what it would take to survive,” co-owner Leslie Gornik said. “If we open, we have to start over from scratch.”

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Hundreds gathered around Business Block on the anniversary of he fire on Wednesday to witness a military-style white-glove ceremony to pay respects to the families who lost loved ones. Photos of those killed from the neighborhood were placed at the Palisades Village Green next door.

The Palisades fire burned for 24 days, destroying more than 6,800 structures, damaging countless others and forcing most of the neighborhood’s residents to move elsewhere. About 30 miles northeast, the Eaton fire burned more than 9,400 structures. Combined, the fires killed 31 people.

Remnants of the the Pacific Palisades Business Block, which was completed in 1924 and burned in the Palisades fire.

The few businesses that are back in Palisades serve as a beacon of hope for the community, but owners and managers say business is down and customers haven’t returned.

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Ruby Nails & Spa, located near the Business Block, was closed for eight months before reopening in September. Now business is only half of what it was before the fires, owner Ruby Hong-Tran said.

“People come back to support but they live far away now,” she said. “All my clients, their houses burned.”

Ruby Hong-Tran, owner of Ruby Nails & Spa in Pacific Palisades, says her business is half of what it was since reopening.

Ruby Hong-Tran, owner of Ruby Nails & Spa in Pacific Palisades, says her business is half of what it was since reopening.

It took months to clean all the smoke damage from her shop. The front is still being fixed to cover up burn damage.

The firestorms destroyed swaths of other neighborhoods, including Malibu, Topanga, Sierra Madre and Altadena, where businesses and homeowners also are struggling to build back.

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Some are figuring out whether it is worth rebuilding. Some have given up.

The Los Angeles Economic Development Corporation estimated last year that more than 1,800 small businesses were in the burn zones in Pacific Palisades, Malibu and Altadena, impacting more than 11,000 jobs.

Businesses say they often have been on their own. The Federal Emergency Management Agency tasked the U.S. Army Corps of Engineers to clean up debris at private residences, some public buildings and places of worship — but not commercial properties.

Business owners had to clean up the charred debris and toxic waste on their properties. Many had to navigate complicated insurance claims and apply for emergency loans to stay afloat.

Rosie Maravilla, general manager of Anawalt’s Palisades Hardware, said damage to her store was limited, and insurance covered the cleaning, so she was able to open quickly. The store reopened just one month after the fire.

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Rosie Maravilla, general manager of Anawalt Palisades Hardware, in front of of the store in Pacific Palisades.

Rosie Maravilla, general manager of Anawalt Palisades Hardware, in front of of the store in Pacific Palisades.

Still, sales are 35% lower than what they used to be.

“In the early days, it was bad. We weren’t making anything,” Maravilla said. “We’re lucky the company kept us employed.”

The customer base has changed. Instead of homeowners working on personal projects, the store is serving contractors working on rebuilding in the area.

An archival image of the area in Pacific Palisades hangs over the aisles in Anawalt Palisades Hardware.

An archival image of the area in Pacific Palisades hangs over the aisles in Anawalt Palisades Hardware, where business is down despite a customer base of contractors who are rebuilding.

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Across the street from the Business Block, the Palisades Village mall was spared the flames and looks pristine, but is still closed. Shop windows are covered with tarps. Low metal gates block entry to the high-end outlets. The mall is still replacing its drywall to eliminate airborne contaminants that the fire could have spread.

All of its posh shops still are shut: Erewhon, Lululemon ,Bay Theater, Blue Ribbon Sushi, athletic apparel store Alo, Buck Mason men’s and Veronica Beard women’s boutiques.

Mall owner and developer Rick Caruso said he is spending $60 million to reopen in August.

The need to bring back businesses impacted by the fires is urgent, Caruso said, and not just to support returning residents.

“It’s critical to bring jobs back and also for the city to start creating some tax revenue to support city services,” he said. ”Leaders need to do more to speed up the rebuilding process, such as speeding up the approval of building permits and stationing building inspectors closer to burn areas.”

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Pedestrians walk past the Erewhon market in Palisades Village that plans to reopen this year.

Pedestrians walk past the Erewhon market in Palisades Village that plans to reopen this year.

(Genaro Molina/Los Angeles Times)

Wednesday, on the anniversary of the fire, Caruso sent three light beams into the sky over the mall, which met in one stream to honor the impacted communities of Pacific Palisades, Altadena and Malibu.

The nighttime display will continue through Jan. 31.

Business Block’s history dates to 1924, when it served as a home for the community’s first ventures. In the 1980s, plans to tear it down and build a mall sparked a local uprising to save the historic symbol of the neighborhood’s vibrancy. It was designated a Los Angeles Historic-Cultural Monument in 1984.

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Tiana Noble, a Starbucks spokesperson, said the landlord terminated the company’s lease when the building burned down. Bank of America said it secured a new lease to rebuild nearby.

Business Block’s fate is still unclear. Some people want to preserve its shell and turn it into a memorial.

This week, it was ringed by a fence emblazoned with the words “Empowering fresh starts together.”

Caruso said the ruins should be torn down.

“It needs to be demolished and cleaned up,” he said. “It’s an eyesore right now and a hazard. I would put grass on it and make it attractive to the community.”

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Twisted and scorched remnants of the the Pacific Palisades Business Block still are there a year after the fire.

Twisted and scorched remnants of the the Pacific Palisades Business Block still are there a year after the fire.

A short walk from the Business Block and near a burned-down Ralphs grocery store is the Palisades Garden Cafe, one of the few places in the neighborhood to get food and drink. The small, vibrant cafe was closed for two months after the fire, during which the employees went without pay.

Manager Lita Rodriguez said business is improving, but misses the regulars.

“We used to get tons of students and teachers who live and work here,” she said. “Our customers are mostly contractors now.”

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