Comment by bachmeier
2 years ago
To me this is not even slightly surprising. Red Lobster used to be at the top of our list of restaurants. Then in recent years the quality of both the food and service deteriorated. One visit the food was so bad I couldn't even eat it. That was compounded by not having a server to talk to. Took our order and never returned - even had someone else bring out the order.
The thing about a restaurant is that you'll always have business if the food and service are good. You can talk about how the market changed or whatever, but no restaurant can survive at that price point while offering so little.
We had a chain BBQ restaurant in town that had a booming business for more than a decade. Then the quality of the food went downhill and they shut down, citing lack of a market. They had a market for years but there's no market for crap. Red Lobster's situation is no different.
Increasingly I think the financialization of everything makes us less capable of understanding the world.
"Red Lobster failed because of X corporate restructuring," "Red Lobster succeeded due to Y ad campaign." People go to restaurants for reasons completely unrelated to things like that. Those things are important, but just constitute the small slice of reality that can easily be measured.
I saw a Twitter thread arguing how the video game Stardew Valley succeeded due to the way it was marketed. Marketing is important, but maybe the game succeeded because it was cute and had a soul and is fun to play. You can't measure that.
The problem is that executives will ask "what makes Stardew Valley successful?" and never make it to this answer:
A developer who genuinely cares about the quality of the game, interacts positively with the community around it, and makes decisions that demonstrate his caring for the game and the community. Specifically, decisions that often leave revenue on the table, particularly in the short term but arguably in the long term as well.
That sort of caring is largely impossible for private equity, and it's really hard to successfully fake.
I think there's an even more-overlooked factor that most people never get to: Good-old random chance in timing and markets and events.
We humans are hardwired to hate that idea, we always want an understandable story with distinct causes and effects... So much so that we will often invent one, even for things we "know" are random, like: "Okay, now the next one will almost certainly be heads, because..."
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That's because caring and liquidity/fungibility are at opposing poles. People sell cattle but not their pet cows. Something like that.
We live in a time where almost everything is getting worse. Products are getting smaller, service is getting worse, businesses are closing, quality is going down. I don't think I've ever experienced such an obvious decline in commercial society in my entire life.
Is it the financialization of everything? Is that we reached peak growth and profit increases are only possibly through extreme optimization? Is it financial inequality?
Oh man I FEEL this deeply.
I was just wondering if it's just me feeling like everything is on a highway to terrible.
- Prices in my city, just this year, have felt like they've jumped 10 or 15 percent.
- I've been working in tech for a decade now and for the first time a new company simply refused to negotiate salary.
- I feel financially worse off than 5 years ago making a third of what I make now.
- Housing prices have exploded. I worry I will never own a home.
- Denmark has started deleting public holidays to save our social welfare state.
- Health care is the worst it's ever been. You can not get basic health diagnostics for most things in Denmark without screaming.
- Europe has a literal war at our doorstep.
- Public transit prices have jumped in the last year.
- Good quality grocery stores have closed and been replaced with discount chains. The quality of the produce is terrible.
- Democracy feels increasingly shittier and hijacked by two extremist poles of very-online meme-thought.
- Gen Z is looking like the most garbage generation of the last two centuries with more mental illness than any generation in history.
- Everything has become a political lightning rod.
I feel exploited by invisible forces I can't see or touch or name. I feel as if I have no mastery over my own life. I no longer know why I continue to contribute to a society that does not give anything back to me for my labor and exploits the best years of my life for taxes that do not improve my lot in life.
Can someone tell me everything is going to get better?
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Sometimes it's monopoly. Not this time, though; Red Lobster was a minor player. Red Lobster was a leveraged buyout. (Most "private equity" is leveraged buyouts. The buyer seldom puts up full cash.) Plus the equity to debt conversion.
Tax law favors debt too much.
I've been thinking about this a lot too. It just feels like all ends of the spectrum, for a consumer, are crashing down. Everything is harvesting and selling data, stock at stores is low and usually favors the generic (and sometimes lesser) option over the higher quality names... Apps like facebook, twitter, IG, tiktok, reddit, and youtube are making life worse for their users. Overall, it is kind of a depressing time to observe.
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In case it helps you, I find the following products / services have improved their quality and offering in the past decade:
TVs: I get a much nicer TV now for the same amount what I paid for a crappier one in 2012
Smartphones: very powerful and do a lot of things better (eg. camera, connectivity)
Entertainment: Netflix, HBO, Hulu, Prime, ... you can pick 1-2 of those, binge all you want and then rotate. Costs < 30$/mo
Travel options: Ok, even in 2014, there were very good travel options. But I see a lot more options these days (direct flights from SF, more obscure locations on the travel map etc)
Cars: I bought a new car in 2021 (previous one was 2010). New one is cheaper and has some nicer features (rear view & other cameras, various warning signals)
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It’s what inverting the age pyramid feels like as the average age of society keeps increasing and risk mitigation becomes the meaning of life, espoused in phrases like ‘stay safe!’
We are slowly in the midst of going through a black plague of sorts when it comes to the % change in population that is occurring, except we will be left with an elderly population instead of a dynamic healthy and young population.
Corporate consolidation, some would say. IIRC, at some point in the last some decades, the US got the bright idea that antitrust isn't really worth enforcing if potentially anticompetitive business practices and mergers can also result in lower prices.
That kinda works— Until a small handful of corporations gain enough power that there is not really any meaningful competition anymore, and they can effectively engage in price-gouging with monopoly power. Which has now happened, apparently, in most industries. …Hence everything getting worse.
…I think there was an article I read some time back that explained it really well. But I can't seem to find it, so these links will have to do. The Guardian/Youtube ones might seem clickbaity, but that man was also Clinton's Secretary of Labor:
https://en.wikipedia.org/wiki/The_Antitrust_Paradox
https://www.theguardian.com/commentisfree/2024/apr/11/compan...
https://www.youtube.com/watch?v=YMZKegjJurk
https://www.politico.com/news/2021/07/08/biden-assault-monop...
https://pluralistic.net/2021/08/13/post-bork-era/#manne-down
https://www.theverge.com/23645057/taylor-swift-ticketmaster-...
https://news.yale.edu/2024/04/24/lax-antitrust-enforcement-l...
https://www.journals.uchicago.edu/doi/abs/10.1086/675862
Ticketmaster, Facebook, grocery prices, even the Boeing 737 mess— I suppose a lot of these problems do basically come down to a company or an oligopoly getting so powerful that nobody can hold it accountable anymore.
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Most people used to believe in Jesus Christ with values built on the Bible. That was true from lay people to Ivy League colleges to even folks in prison. His blessings with His accountability both made many good things happen and limited lots of damage we’d cause. America was prosperous as the Bible said it would be.
Over the decades, people turned away from God and those values to chase new ones: money first, pleasure first, self/ego first, atheism, subjectivism, Marxism. These by themselves, if increasing enough, guarantee massive amounts of suffering for people. Whereas, the fruit of the Spirit in Galatians only does good for people when you increase it. Society made their choice.
As in Romans 1, God handed us over to our depraved minds and sins to let us feel the full consequences of selfish, godless, subjective societies. Everything has gotten worse. The solution is to repent and turn back to what God gave that worked before. Then, gradually improve ourselves in any weak areas. Wr must bake righteous values back into our families, businesses, and government. Inward change creates positive, outward results.
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This is the reason I've always been a detractor of purely relying on "data driven decision making". Being data driven is great... if paired with intuition and common sense.
But what ends up often happening is data-driven myopia. You see some statistic that doesn't seem optimal and you end up optimizing for that instead of figuring out how it fits into the big picture.
Restaurants, at the end of the day boil down to food. You serve food. People either like the food or they don't. How many customers you get is a function of how much people like the food, how competitive the pricing on the food is, and the market you're in.
Red lobster at the end of the day suffered from people not wanting to pay what they were charging for low quality, uninspiring seafood dishes.
People nowadays are struggling more (spare me the CPI data, hedonics and other basket adjustments mean the situation for most people is quite a bit worse than it was a few years ago) and there needs to be a value prop for dining out.
> Restaurants, at the end of the day boil down to food. You serve food.
To expand on this a little, restaurants serve food in a building brought to your table by people. If the building/table/environment is dirty or just uncomfortable people don't want to be in it. If the people preparing and serving the food are doing a bad job people won't want them doing it. If a restaurant drops the quality of the food, environment, or personnel they are going to lose business.
As you say it's the value proposition. I go to a restaurant because I want to just pick a food, eat it, and leave. The "hard" parts of cooking and cleaning are someone else's job. All restaurant patrons are willing to pay some premium over the cost of the raw ingredients to save their time and effort. But as the experience gets worse that value proposition starts to erode.
For me and I imagine many people the experience doesn't need to be mind blowing. It just needs to be not shitty.
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The catch-22 is that being data-driven means being driven by what data you can measure. And that is an absolutely gobsmackingly fatal flaw.
For a 1000+ page exposition on why this is such a fatal flaw see James C. Scott's 1990s tome "Seeing Like a State" which addresses precisely this issue with receipts brought from fields ranging from agriculture, urban planning, politics, family naming systems, and more across at least 4 or 5 continents and a century.
It's an essential non-partisan read that manages to piss everyone off by being a peon to left anarchism in many ways while saying "actually yes Hayek was right about sensitivity to local conditions" and "actually the NHS and NWS are good and sometimes centralized planning isn't the worst solution".
I've not seen any direct link between them but I feel like you can draw a very firm line between it and Piketty's Capital and Ideology. You might think "wait isn't Piketty the guy who's completely data driven and publishes stupidly large amounts of xlsx files as appendices" and you'd be right except in his second book he's leaning far more heavily on sociology and just using financial data (much imputed from tax records) as support for sociological arguments that align very closely in many respects.
It's all about information. Some information can be boiled down to statistics and numbers, and that's great!
Some cannot be.
The executives who sits in their office are not going to be able to smell and taste or care about the food.
Data-driven X is a semantic trick to absolve people from owning their X and being accountable for it; decisions just happen to be the most damaging usage. Let data _inform_ you.
I call this metric fetishism
> because it was cute and had a soul and is fun to play.
I'm a full on stardew addict. I was waiting for a game to rekindle the feeling I had playing the original harvest moon on snes. natsume just made a ton of crap sequals focused on making it all 3d.
concernedape, distilled the snes version down to what made it fun and built it up fron there. it scratched the itch better than any of natsume's sequals ever could.
But a lot of games are cute and fun to play that do not succeed
Which doesn't mean they aren't necessary conditions. It just means they aren't sufficient conditions. A game needs other things too, one of which may be luck, and others of which may be incompatible with the private equity model.
Bit of a rant:
Luck. Word of mouth. Anyway, things you can't control (and can barely influence) as a developer/publisher. So, we face the notion that, perhaps, if we want people to take the risk of creating and sustaining a business for reasons other than simple profit (say, to provide a needed or pleasant service), the proposition might need to be better than, "Succeed or die (sometimes literally)." Because none of it's a sure thing, and it can't be, but sane people generally aren't going to bet their life or livelihood on a risky venture (assuming that irrational passion is a form of insanity).
I'm not convinced that is actually true. Can you think of an example? A game that has near universally good reviews but is not successful?
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I think Stardew filled a niche that wasn't being catered to. There were no Farm Sims that weren't a cash grab released since Farmville. Stardew caught all the people who remembered Harvest Moon fondly.
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Sometimes it's just timing and/or luck. Think of some TV show that was big say 10 years ago, would it do the same today? Maybe. Maybe not.
Product + Marketing + Timing + Luck = Maybe Successful
The thing is, there's no VP of Timing. There's also no VP of Luck. These factors are ignored because there's no one to champion them. Yet they are very real.
Unsuccessful Product !== Bad Product or Bad Marketing
This is what people mean when they use the term soulless capitalism. The increasing financialization of everyone leads us to optimize for the things we can measure assuming those are the things that matter, and in the end the optimizations erase everything good.
It's not the optimization per se, it's taking it too far, over-playing it to the point of removing the magic, the special sauce, etc.
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> I saw a Twitter thread arguing how the video game Stardew Valley succeeded due to the way it was marketed. Marketing is important, but maybe the game succeeded because it was cute and had a soul and is fun to play. You can't measure that.
Thought leaders seem to know everything except when to keep their mouth shut for once. But I digress...
If firms are being punished for poor quality, then the system is working, even with enshittification becoming more commonplace. All of the Very Important Business People can sit around and scratch their heads about why the market seems to change on them when they screw up their offering, and they can consult overpriced business fortune tellers to reassure them that it was that pesky market's fault, but that doesn't change the outcome.
I'll miss Red Lobster's cheesy biscuits, but if they've dropped the ball on quality they had this coming to them.
what about all the other cute fun to play soulful games that DONT succeed?
I think this is naive. When (for example) a private equity fund buys a casual dining chain, they will go through how the business is run in painstaking detail and try to understand exactly what makes the experience 'work' and what changes are possible or advisable.
If the olives in the salad don't taste as good or there are fewer breadsticks or the lighting makes it feel more relaxed or the greeters have more time or the menu gets shorter or the desserts arrive quicker or the pasta is less salty, that's because someone involved in that decision decided it was worth paying more for or not worth paying what they were currently paying, taking into account what factors will make people change their mind about eating there. There isn't just a random dude who sits in a room somewhere and says "let's make the food worse" based on his own whim.
If the food gets worse and it just doesn't have that same vibe anymore and you don't want to go there next time, it's because an expert in marketing or restaurant management or food design made an error in their judgement about what they could cut, what they should improve, and what they needed to keep the same. That, or the change which turned you off attracted more customers or more desirable customers who have different preferences to you.
Your restaurant changed because its corporate policy changed. But the capital structure is totally relevant in understanding why that changed.
> There isn't just a random dude who sits in a room somewhere and says "let's make the food worse" based on his own whim.
Not directly, but only 1 step removed. The dude is saying "let's charge the same or more for cheaper, lower-quality food, to make a higher margin so our PE firm makes more money".
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Do you think private equity funds could have other end goals when buying a company?
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Quality control and management ... seem to be the secret sauce to restaurants and are amusingly unrelated to the actual food / recipes and etc.
I too have a few local places that despite being busy and great food for ages, suddenly couldn't keep good people working there. They were doing great then just fell on their face.
I suspect that they just couldn't adapt to it being more difficult to retain / keep good people and everything else suffered.
Dominoes Pizza (US national pizza chain), seems to be the alternate story, long time bargain pizza chain with poor quality.... got better quality pizza and reportedly took off again.
For my poor friends the whole 'emergency pizza' thing was amazing marketing. Every other company is actively screwing them, increasing rates to unaffordable, shrinking sizes. Domino's not only stayed affordable, but said, hey, times are though, if you get in a crunch, here's an emergency pizza to fill the gap. Friggen' overdraft protection on food for their kids. The amount of good will that corporate marketing campaign brought in that group I can't even tell you. I'm talking about the single dad's working two jobs, moved back home with their parents segment. They now feel like Dominoes is the only company that hasn't f'd them. They actively talk about Dominoes randomly (we guys don't have much to talk about but still it doesn't normally fall to discount pizza discussion).
This happened to a local sports-bar chain around us. It was always decent and our first choice for family nights out, but after Covid it went downhill, locations closed, and the last location close by just started falling flat... empty even at busy periods, no wait staff, declining quality, etc. It just up and closed shortly after.
Lately for pizza I've only been ordering from Dominoes, mostly because it's sort of cheap but also consistent.
Not fantastic, not bad, but always pretty good.
I hope they keep up with it, whenever I go in they always appear fully staffed and in good spirits.
I used to really like Red Lobster, for the money they were quite good. Their cheese rolls are still great. That being said, I haven't been in years. Just the other day I went to a Chili's, I remember going to Chili's all the time in high school and college. Hadn't been in a while. The food quality was just so off from what it used to be. I was really disappointed. I honestly am not sure what these restaurants are thinking. Menu restructuring to cut back portions and also quality control is a significant problem. The only "fast casual" restaurant I can think of at the moment that has maintained its relative quality is Outback.
I stopped going after a waitress mentioned my mozzarella sticks were still in the microwave. As I sat there, thinking about the Sam’s Club cardboard box they might have come from, I realized that many restaurants probably do the same. However, I had hoped Red Lobster would at least use an oven.
I assume Red Lobster preemptively lowered the food grade and the service labour costs to avoid raising the prices in their menu drastically. We've had a wave of very strong inflation pretty much worldwide - or at least wherever there have been covid lock-downs and huge government payment schemes - and for many businesses, especially those that already operated at the margin of profitability, this has been their death knell.
I'm not so sure that Red Lobster would have survived if instead of lowering the quality of the product they'd have just raised the prices by say 80% overnight. I mention 80% because that's how much many hospitality businesses have raised prices in my area in London since the pandemic.
I've seen businesses go bust here that have tried both things:
- lowering quality and raising the prices by less than the average
- maintaining roughly the same quality and service but raising prices drastically
Plenty of examples in my area of businesses just collapsing with either strategy. People simply would not accept the new prices in many cases.
A business that is sort-of a luxury business like those specialised in oysters, shellfish in general, high-end cuisine etc only a very select few have survived. Those that are large chains have suffered the most, because they are not seen as so much of a special expenditure and people would just stop going.
Red Lobster perhaps would have fared better by not reacting and simply raising prices. Who knows, it's easy to make the counterfactual scenario in the abstract.
Yep, it's the food. There are many famous 'food destinations' around the world. Usually the line goes around the block. You always have to wait, either in line, for a reservation, etc. People wait because it's worth it. The food is good.
Well, it's could also have become a meme or whatever the right term is. There's a lobster roll place in a Maine coastal town that always has lines around the block with maybe hour waits. There's a place right across the street that IMO is just as good--as are a bunch of other Maine coastal places you've never heard of.
> The thing about a restaurant is that you'll always have business if the food and service are good.
This is just demonstrably false. Good food and service is no guarantee of product-market fit.