The fishy death of Red Lobster • Hacker News Board

Re: The fishy death of Red Lobster

#201

Post by kiba » Thu, May 02, 2024, 6:28 PM UTC

alfalfasprout wrote: post #184

asdfman123 wrote: post #158

Earlier quoted context omitted.

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 arg…

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 f…

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.

Re: The fishy death of Red Lobster

#202

Post by FireBeyond » Thu, May 02, 2024, 6:30 PM UTC

SoftTalker wrote: post #116

OkayPhysicist wrote: post #111

Even without private equity's meddling, Red Lobster would have been in a rough spot. Family dining as a segment (lower end restaurants, but with table service) is being squeezed aggressively. Compared to Gen X and before, Millennials on average are valuing food quality over service experience, ballooning the fast casual (order at the counter, but nicer than fast food) segment. This is squeezing family dining from bel…

And speaking of food quality, restaurants like Olive Garden and Red Lobster are just terrible. I'd rather get a fast-food fish sandwich, or fish and chips at the local brewpub, than eat anything at Red Lobster.

And it's not a secret. Fettucine Alfredo? They open the plastic packet from Sysco, microwave for the appropriate amount of time, same with the sauce, put it on a plate... $18.

Re: The fishy death of Red Lobster

#203

Post by Animats » Thu, May 02, 2024, 6:30 PM UTC

wvenable wrote: post #182

asdfman123 wrote: post #158

Earlier quoted context omitted.

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 arg…

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 financia…

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.

Re: The fishy death of Red Lobster

#204

Post by NegativeK » Thu, May 02, 2024, 6:31 PM UTC

mindracer wrote: post #26

rwmj wrote: post #17

Earlier quoted context omitted.

They're currently buying up veterinary practices in the UK and turning them into cash cows. This has the effect that pet insurance has gone through the roof, and general vet bills are much higher than they used to be. Pets suffer too if owners can't afford to treat them any longer. ( https://www.theguardian.com/business/2024/mar/12/uk-vet-pric... )

A few years ago my cat needed his teeth cleaned my local vet charged me £125. The same vet, now owned by CVS, is now going to charge £250

$250 for a cleaning in the US is still a loss leader.

The actual cost to the clinic of a dental cleaning is ridiculous for how often it needs to be done.

Re: The fishy death of Red Lobster

#205

Post by NegativeK » Thu, May 02, 2024, 6:33 PM UTC

madaxe_again wrote: post #154

sib wrote: post #56

Earlier quoted context omitted.

How long does the process take? What is the overhead (space / equipment / other costs)? And therefore, how much is the provider earning per hour?

About 20 minutes, some disposable gloves, a disposable toothbrush head impregnated with toothpaste. So about €25 an hour. Commercial rents for small spaces are dirt cheap here - probably about €600/mo. That’s probably the driving factor in the U.K. - commercial property is eyewateringly expensive.

Respectfully, that's brushing the teeth, which is a subset of dental cleaning.

Dental cleaning requires dental tools and anesthesia.

Re: The fishy death of Red Lobster

#206

Post by giantrobot » Thu, May 02, 2024, 6:33 PM UTC

alfalfasprout wrote: post #184

asdfman123 wrote: post #158

Earlier quoted context omitted.

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 arg…

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 f…

> 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.

Re: The fishy death of Red Lobster

#207

Post by pwillia7 » Thu, May 02, 2024, 6:34 PM UTC

andrewla wrote: post #103

These private equity deals are the convergence of a couple of phenomena. The most obvious is low interest rates, which is fortunately dying off. The ability to borrow lots of money is something that smaller, well-run companies, are reluctant to do. Why bring in a bunch of cash to expand and take on debt when you are operating at a reasonable profit? The secondary is the undervaluing of customer goodwill -- what PE fi…

PVH is the first time I realized this is what everyone was doing. I have never been able to put it so succinctly though, thank you.

Re: The fishy death of Red Lobster

#208

Post by snarfy » Thu, May 02, 2024, 6:34 PM UTC

bachmeier wrote: post #127

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…

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.

Re: The fishy death of Red Lobster

#209

Post by banannaise » Thu, May 02, 2024, 6:34 PM UTC

TheMagicHorsey wrote: post #57

dmurray wrote: post #16

Earlier quoted context omitted.

The "private equity kills beloved brand" stories are usually overcooked, as far as I can tell. They usually involve PE taking over firms that were already in financial trouble, which is what made them attractively priced to PE in the first place. The PE firm would also prefer to have a nice profitable business, but if they can't turn it around, they have options like asset stripping or selling the name to a different…

I never understood how PE firms get blamed for rising costs in doctor's offices and vets. If a PE firm can just unilaterally raise prices, then why didn't he mom n pop practices do the same? Where is the competition? Why is there a barrier to entry that prevents some new young doctor or vet from coming in and undercutting the PE business?

> If a PE firm can just unilaterally raise prices, then why didn't he mom n pop practices do the same?

Because they have a connection to their community, which means both (1) they're more vulnerable to backlash, and (2) they don't want to, because it would be taking directly from other members of their community.

Mom-and-pop shops tend to price based on what is fair. PE firms tend to price based on what is profit-maximizing.

Re: The fishy death of Red Lobster

#210

Post by babypuncher » Thu, May 02, 2024, 6:37 PM UTC

SoftTalker wrote: post #116

OkayPhysicist wrote: post #111

Even without private equity's meddling, Red Lobster would have been in a rough spot. Family dining as a segment (lower end restaurants, but with table service) is being squeezed aggressively. Compared to Gen X and before, Millennials on average are valuing food quality over service experience, ballooning the fast casual (order at the counter, but nicer than fast food) segment. This is squeezing family dining from bel…

And speaking of food quality, restaurants like Olive Garden and Red Lobster are just terrible. I'd rather get a fast-food fish sandwich, or fish and chips at the local brewpub, than eat anything at Red Lobster.

There's a local italian restaurant that I frequent which is 30% cheaper than Olive Garden and way, way tastier. There are dozens of other local restaurants that are also cheaper, and tastier, than Olive Garden.

I don't understand why these huge restaurant companies have such a hard time with the "make good food" part of their business model. It clearly can't be that hard if so many small businesses are able to do do it better.