Red Lobster endless shrimp $20! Yay or nay?

[+ augustus]

21 minutes ago, KeepItReal said:

Great chart...but did you actually look at it? Covid stimulus was paid in March 2020 so of course you will pick April 2020 when there is an artificial high! 🙄 When you start with January 2020 instead it looks a bit different, yes? How about you compare Jan 2020 to Jan 2024 instead?

The Covid payments were an anomaly!  Even taking those temporary payments out of the equation, inflation since then has decimated the standard of living.

[+ augustus]

Prices for fuel, food, rent, insurance, property taxes, insurance have soared 30-50% in the past few years and people really have the gall to say things are well.  

[KeepItReal]

7 minutes ago, augustus said:

The Covid payments were an anomaly!  Even taking those temporary payments out of the equation, inflation since then has decimated the standard of living.

I'll ask again: if you compare Jan 2020 to Jan 2024 on the chart you selected...where do you end up? Please don't avoid the question - after all; you are the one who brought it up?  Since I know nothing about economics, perhaps you could explain it to me like I am a small child...or a golden retriever?

[+ augustus]

6 minutes ago, KeepItReal said:

I'll ask again: if you compare Jan 2020 to Jan 2024 on the chart you selected...where do you end up? 

We end up nowhere, that's where.  You brought up the rise in disposable income (and the numbers you cited are incorrect).  Then you totally ignore the double digit increases in prices for goods and services, many of which aren't even included in the CPI numbers or are given a low weighting.  Everyone knows what time it is, except a small minority in denial. THAT is what you are avoiding.

Edited May 15 by augustus

[MikeBiDude]

Moderator note: this has gone way off topic. If you want to continue to discuss this topic I suggest taking it to the financial sub-forum.

Let’s get back on Red Lobster topic. Thanks!

[+ DynamicUno]

I think Red Lobster's troubles have more to do with the changes in ownership in the past couple decades than one badly executed promotion.  It's a eye catching headline, sure, but if the business was fundamentally healthy it would be no more than a blip.

To be clear, Red Lobster was a mature brand with a lot of older locations, and a fairly downmarket reputation. It was no longer a growth business, it was the seafood place you went with your boomer (grand)parents after church.  There was a lot more competition from other newer chains, but still, it had a decent level of goodwill.  If it was structurally sound, I think it would be struggling to stay relevant but not going bankrupt.

Red Lobster was owned by Golden Gate Capital for several years last decade.  It's typical for PE firms to saddle their targets with a lot of debt as part of the acquisition.  It's also common for them to sell off the assets like real estate.  They'll take a location where the chain owned the property and sell the lot to a real estate investment firm and execute a long term lease.  They restaurant is still on the hook for any maintenance and upkeep on the property, so the new landlords provide very little service for the rent payments.  So the PE firm gets their aquisition paid off and they leave the business with high debts and more operating expenses than they had before the takeover.

If GCC left Red Lobster with drained assets and high debts, and you add the challenging post-pandemic restaurant environment on top of that, it's little wonder they're struggling to keep up.  It would certainly explain the turnover in their c-suite ever since Thai Union bought them, I can see these executives coming in, getting a real look at the balance sheets and noping out as soon as they could.

That would also explain the sudden move to close a large number of locations. They can stem the bleeding from underperforming locations, and hopefully recover enough value from the assets that get auctioned off to pay down the debts and get to a more stable financial position.  Unfortunately, a bankruptcy will probably still be necessary to force a restructuring of the remaining debt (and hopefully not a liquidation).

Sadly, the chain retaurant industry has been a big target for these firms, and it leaves empty buildings and lost jobs in the wake.  Name any chain that's died or struggled to survive in the past many years and it's a reasonable bet that there's been an leveraged aquisition in the process.  Consumers pay higher prices, employees lose jobs and or better wages, and cities are left with empty storefronts that become a hole in their tax base.  But somehow the blame gets shifted to the middle class because a soccer mom stopped for a latte.

 

 

 

Edited May 16 by DynamicUno

[+ augustus]

Reb Lobster filed for bankruptcy today, May 19, 2024.   Sad.

[BSR]

6 minutes ago, augustus said:

Reb Lobster filed for bankruptcy today, May 19, 2024.   Sad.

For all the employees who have lost or will lose their jobs because of this bankruptcy filing, yes, it's very sad.  For the world of gastronomy, meh, not so much.

[+ DynamicUno]

Reports are that Red Lobster plans to enter into an stalking horse arrangement as part of the bankruptcy that would sell the business into a new entity that will be controlled by the creditors.  If another buyer does not come forward, I think it's probable the remaining business will be wound down in liquidation. Personally, I will be sad to see yet another brand from childhood disappear, but I have to admit I've only eaten at one a handful of times in the past 10 years.  Nostalgia alone is probably not enough to save the brand, it's in a moribund segment that is getting squeezed from above and below.  It's never going to be a growth company again.  The new owners are probably going to be tempted to get the value they can extract quickly by parting out the company, even if they could emerge from bankruptcy in a viable position.

[samhexum]

9 hours ago, augustus said:

Reb Lobster filed for bankruptcy today, May 19, 2024.   Sad.

 

9 hours ago, BSR said:

For all the employees who have lost or will lose their jobs because of this bankruptcy filing, yes, it's very sad.  For the world of gastronomy, meh, not so much.

 

55 minutes ago, DynamicUno said:

I will be sad to see yet another brand from childhood disappear, but I have to admit I've only eaten at one a handful of times in the past 10 years.  Nostalgia alone is probably not enough to save the brand, it's in a moribund segment that is getting squeezed from above and below.  It's never going to be a growth company again. 

The late founder of Red Lobster refused to obey Jim Crow laws, achieving success & a special place in history among Black Americans.

 

In 1938, Bill Darden, founder of Red Lobster and Olive Garden restaurants, opened The Green Frog with the tagline ”service with a hop.” 

He allowed his Black and white customers to sit where they wanted. So technically, as an outspoken public ally, he risked being lynched. But he survived and his business was profitable and lucrative. 

In 1968, Darden, who used his profits from the Green Frog to invest in Florida-based chain restaurants and Howard Johnson properties, opened the first Red Lobster restaurant in Lakeland, Florida. It was so popular that one month later he had to open another one to keep up with the demand.

As Darden’s restaurant enterprise grew, its commitment to being a leader in diversity by mirroring its labor pool with the cultural fabric of the local community became clear.

[+ Vegas_Millennial]

On 5/15/2024 at 12:31 PM, KeepItReal said:

I'll ask again: if you compare Jan 2020 to Jan 2024 on the chart you selected...where do you end up?

I'll answer:  worse off than I was in January 2020.  After my mortgage, utilities, insurance, petroleum, and food, I have less to spend on recreation and investing than I did in January 2020.  Great question!  It really made it easy for me to put in perspective.

From 2003-2023, I ate two meals per day at restaurants, including a visit to Red Lobster about once each quarter.  Since 2023, I just don't have the money left in my paycheck to eat out, despite a promotion and pay raise last year.  I now eat a can of soup for dinner and a sandwich for lunch every day, because my "fixed" expenses just rose way too much to afford eating out as part of my daily routine.  My last visit to Red Lobster was in 2022.  I've had to cut back on hiring, now limited to only when I travel.

Edited May 21 by Vegas_Millennial

[maninsoma]

10 hours ago, Vegas_Millennial said:

I'll answer:  worse off than I was in January 2020.  After my mortgage, utilities, insurance, petroleum, and food, I have less to spend on recreation and investing than I did in January 2020.  Great question!  It really made it easy for me to put in perspective.

From 2003-2023, I ate two meals per day at restaurants, including a visit to Red Lobster about once each quarter.  Since 2023, I just don't have the money left in my paycheck to eat out, despite a promotion and pay raise last year.  I now eat a can of soup for dinner and a sandwich for lunch every day, because my "fixed" expenses just rose way too much to afford eating out as part of my daily routine.  My last visit to Red Lobster was in 2022.  I've had to cut back on hiring, now limited to only when I travel.

Just curious: Do you have an adjustable rate mortgage?  I'll agree that most things cost a lot more now (though my insurance hasn't spiked, either), but one of the many benefits of home ownership is having a fixed monthly payment for the life of the loan versus having one's rent go up every year.

[+ Vegas_Millennial]

1 hour ago, maninsoma said:

Just curious: Do you have an adjustable rate mortgage?  I'll agree that most things cost a lot more now (though my insurance hasn't spiked, either), but one of the many benefits of home ownership is having a fixed monthly payment for the life of the loan versus having one's rent go up every year.

Nope, it's a fixed rate.  And I'm thankful that I'm not poor or struggling by any means.  I'm just not living as high on the hog as I was before January 2020.  Sorry, Red Lobster Cheddar Biscuits, I miss you too.

I guess McDonald's, Red Lobster, and Olive Garden are only for the 1% now.

Edited May 21 by Vegas_Millennial

[+ BenjaminNicholas]

2 hours ago, Vegas_Millennial said:

I guess McDonald's, Red Lobster, and Olive Garden are only for the 1% now.

I'm assuming you're being hyperbolic here.

[+ Vegas_Millennial]

20 minutes ago, BenjaminNicholas said:

I'm assuming you're being hyperbolic here.

A little, but also just trying to make people think.

Right now I am in the Top 10% of U.S. (both by annual income, and by net worth for my age), and I've cut out McDonald's and Red Lobster for budget reasons.  The Top 10% is not even close to the Top 1%, but Red Lobster and McDonald's are not close to Michelin star restaurants either. 

McDonald's reported losing customers who make less than $45K U.S. per year as they increased menu prices this year.  Someone who earns only $32K U.S. is actually in the Top 1% of world incomes.

Therefore, it is not a jump to say that only the Top 1% of worldwide population can afford to eat at a McDonald's or Red Lobster.  And even the Top 10% U.S. population has cut back on these "luxuries".

[+ Vegas_Millennial]

2 minutes ago, Vegas_Millennial said:

A little, but also just trying to make people think.

Right now I am in the Top 10% of U.S. (both by annual income, and by net worth for my age), and I've cut out McDonald's and Red Lobster for budget reasons.  The Top 10% is not even close to the Top 1%, but Red Lobster and McDonald's are not close to Michelin star restaurants either. 

McDonald's reported losing customers who make less than $45K U.S. per year as they increased menu prices this year.  Someone who earns only $32K U.S. is actually in the Top 1% of world incomes.

Therefore, it is not a jump to say that only the Top 1% of worldwide population can afford to eat at a McDonald's or Red Lobster.  And even the Top 10% U.S. population has cut back on these "luxuries".

The silver lining to all this:

I did buy a mix for Red Lobster's Cheddar Biscuits at the grocery store and made them at home for company.  They were just as good as the ones from the restaurant!

[MikeBiDude]

Chapter 11 BK does not necessarily mean an end to the chain. Under reorganization they can reject some leases, work out some debt, etc. The “stalking horse” angle is interesting…perhaps the lenders will accept a plan like this and keep some of the units open.

I stay in a Vrbo in Honolulu that has a Red Lobster directly under it, same building. The tourists pack the place…20-30 minute wait people outside all the time. That said, an Outback Steakhouse immediately adjacent has closed 🤷🏻‍♂️

[maninsoma]

I couldn't quickly find more recent numbers, but in 2021 apparently the average income in the top 5-10% bracket was about $167,000.  One does not need an annual income of $167,000 to afford McDonald's or even a casual chain restaurant like Red Lobster.

[+ Vegas_Millennial]

1 hour ago, maninsoma said:

I couldn't quickly find more recent numbers, but in 2021 apparently the average income in the top 5-10% bracket was about $167,000.

That sounds correct.

[+ Vegas_Millennial]

2 hours ago, MikeBiDude said:

I stay in a Vrbo in Honolulu that has a Red Lobster directly under it, same building. The tourists pack the place…20-30 minute wait people outside all the time. That said, an Outback Steakhouse immediately adjacent has closed 🤷🏻‍♂️

It must have something to do with the beach ⛱️.  When I was in Honolulu last week, I was craving lobster at a nearby lobster fast food place (even though good lobster is from cold water, and Hawaii is surrounded by warm water).  But there are few seafood restaurants in the island.  By comparison, steak is everywhere.  Every mom and pop shop serves steak and rice in Styrofoam containers.  Maybe this is why Outback Steakhouse failed there.

[maninsoma]

45 minutes ago, Vegas_Millennial said:

It must have something to do with the beach ⛱️.  When I was in Honolulu last week, I was craving lobster at a nearby lobster fast food place (even though good lobster is from cold water, and Hawaii is surrounded by warm water).  But there are few seafood restaurants in the island.  By comparison, steak is everywhere.  Every mom and pop shop serves steak and rice in Styrofoam containers.  Maybe this is why Outback Steakhouse failed there.

We must live in alternate realities.  I was in Honolulu a few months ago and seafood is everywhere.  You can even buy poke (cut up raw fish in a sauce) at mom-and-pop versions of 7-11.  Yes, Hawaiian food is also big on meat (particularly grilled meats) but I wasn't aware of steak and rice being served everywhere.  Maybe we were just paying attention to different places.

[+ Vegas_Millennial]

26 minutes ago, maninsoma said:

Maybe we were just paying attention to different places.

This must be it

[+ JEC]

On 9/21/2023 at 7:45 PM, marylander1940 said:

 

I'm not big on buffet but look forward to celebrating a friend's birthday next week at Red Lobster Silver Spring!

Red Lobster’s New Endless Shrimp Prize Is Too Much of a Good Thing

THETAKEOUT.COM

---

It's one thing to overindulge in shrimp in one sitting, but for a whole year?

 

As a New Englander, this is a never event for me 😂😂🤣

[MikeBiDude]

2 hours ago, maninsoma said:

Yes, Hawaiian food is also big on meat (particularly grilled meats

And Spam! Musubi!

[BSR]

On 5/20/2024 at 10:11 AM, samhexum said:

 

 

The late founder of Red Lobster refused to obey Jim Crow laws, achieving success & a special place in history among Black Americans.

 

In 1938, Bill Darden, founder of Red Lobster and Olive Garden restaurants, opened The Green Frog with the tagline ”service with a hop.” 

He allowed his Black and white customers to sit where they wanted. So technically, as an outspoken public ally, he risked being lynched. But he survived and his business was profitable and lucrative. 

In 1968, Darden, who used his profits from the Green Frog to invest in Florida-based chain restaurants and Howard Johnson properties, opened the first Red Lobster restaurant in Lakeland, Florida. It was so popular that one month later he had to open another one to keep up with the demand.

As Darden’s restaurant enterprise grew, its commitment to being a leader in diversity by mirroring its labor pool with the cultural fabric of the local community became clear.

There's a Red Lobster in Woodbridge NJ where I went with an aunt and/or cousins a few times.  Whenever we went, I noticed that a lot of the customers were black, disproportionate to the demographics of the area.  When I asked my aunt/cousins why it was so popular with blacks, they had no idea but said it always has been.

Aha! so that's why.  Thanks for that bit of history, @samhexum.  While I can't say it changes my opinion of the food, it certainly boosts my opinion of the company.  Tough times ahead for RL.  I wish them all the best.