Consider the Red Lobster

This past March, I tracked down Edna Morris, former president of Darden Restaurants, the parent company of Red Lobster. She was gracious enough to agree to an interview, discussing her time in the restaurant. What follows is the story of the time Red Lobster’s Endless Crab promotion went awry.

Edna Morris is a managing partner in a private equity firm with former NFL star Muhsin Muhammad. Edna Morris has flown in a helicopter over Ecuador while she was investigating shrimp farms. Edna Morris has served as president of the largest seafood restaurant chain in America. Edna Morris owns a pair of upscale casual steakhouses in South Carolina. She talks a mile a minute, with a southern accent, and when she really wants to make a point, she will address you by name: “I will tell you Jordan, I think Darden is just about the best company out there.”

All these things about Edna Morris are true. But if you have heard of her at all, it is likely for a different reason. In 2003, Edna Morris left her position as President of Red Lobster shortly after the company ran an Endless Crab promotion that resulted in major losses for the company. The media narrative was clear: Red Lobster’s President Edna Morris oversaw the disastrous crabfest, and was promptly fired for it. But it wasn’t quite accurate.

In 2003, Red Lobster ran a promotion where, for $20, a patron could eat as much crab as they wanted. What seemed like a fun way to lure families into a seafood restaurant spiraled into an unmitigated disaster. Individual restaurants began charging as much as $5 more in order to offset their losses. “Crab would need to be about $3.25 a pound to comfortably pull off an all-you-can-eat promotion,” said an expert, but at the time it cost closer to $5 a pound. After the 7-week promotion led to a $3 million dollar decline in profits, the promotion was cancelled. Edna Morris cited faulty research as a key problem. “People ate more than a quarter of pound more in reality than they ate in the test.”

It was, as Morris explained, the perfect storm: “We were dealing with higher prices, people were eating more, so it did not end up being a profitable feature for us.”

And the newspapers had their fun: “For some customers enticed by the Endless Crab deal, plowing through piles of crab at Red Lobster seemed to be a contest for bragging rights.” Morris turned down a chance to appear in a Daily Show segment about gluttony.

At the time, executives at Red Lobster’s parent company, Darden Restaurants, Inc. played it off as if they were in on the joke. “It wasn’t the second helping, it was the third one that hurt,” said company chairman Joe R. Lee. But they were not amused. An exec would later claim that those types of all-you-can-eat promotions “may have contributed to sustained declines…”

And Edna Morris was pushed out of her position as the president of Red Lobster and declined to take a different position within the company.

“It’s not like someone called me in and said, ‘ok, the ‘all you can eat crab’ was a disaster,” Morris said, “I think it was more a belief that things could move faster on turning [Darden] around. It was considered in need of a turnaround to stay relevant, to be able to compete in a very different competitive landscape.”

“I was angry. I was embarrassed. I was mad. I was all of those things. So I left,” Morris recalls. “The whole situation was embarrassing and made me angry.” But Morris would land on her feet. After a stint in New York City at the James Beard Foundation, Morris found herself back in the Florida and back in the restaurant game. Currently she finds herself busy as a managing partner of Axum Capital Partners, and as the owner and proprietor of City Range, a restaurant with two locations in South Carolina. When asked whether her falling out at Red Lobster had closed any doors, Morris was definitive: “I don’t think so, Jordan, I really don’t.”

Though Morris admits she sometimes misses the camaraderie that working at a big company like Red Lobster provides, she is not looking back with regret. “I love that both of these things use everything I’ve ever done, all experiences I’ve ever had and it keeps me in an industry that I absolutely love.”

Edna Morris has recovered gracefully from the Endless Crab debacle of ’03 and gained a new perspective. “It certainly didn’t work out like I had planned. I guess it was a good lesson for me,” Mrs. Morris said, “The lesson is that you can overcome that and it is about what you do afterwards.”

Red Lobster is currently running its Endless Shrimp promotion.

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