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The fishy death of Red Lobster

businessinsider.com

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Re: The fishy death of Red Lobster

#421

Post by ninininino »

thrance wrote: post #418

I've seen many people saying, on this site and others, that they "believe in markets", as if it was their profession of faith. When markets are allowed to work "normally", this is what always happens: regulations are lobbied to the ground, resources get depleted, profitable companies get destroyed to make a quick buck and everyone is worse off in the long term. Having a strong economy is sadly harder than letting the…

Market economies destroyed the wildlife fauna of North America. It's incredible when you see photographs of what used to exist here.

Re: The fishy death of Red Lobster

#422

Post by matthewdgreen »

johngladtj wrote: post #398

I'm continually amazed by how much outrage normal and perfectly reasonable business strategies generate in the general public. None of this is unusual or in any way wrong. Red lobster (and olive garden) were mismanaged, and the investment funds were right about that. Their attempts at salvaging the situation were perfectly reasonable, even if they were ultimately unsuccessful. You're welcome to be outraged, but that…

The article tells a fairly clear story of business consolidation and monopoly. The chains had buying power, so suppliers consolidated and removed that power. Then the suppliers became so strong (with the help of PE) that they bought and looted the remaining value from the chain. Ultimately the loser at the end of this story will be the consumer, who has no market power, and any new small restaurants that develop to replace RL.

This is the same story that explains why health care is ridiculously expensive in the US, why we’re unable to supply our military at prices comparable to other nations, why we’ve seen so many price increases across the economy in recent years, etc. Consolidation and unchecked market power abuses. It probably ends with a new Depression that triggers reform, if we’re extremely lucky.

Re: The fishy death of Red Lobster

#423

Post by Yujf »

ninininino wrote: post #421
thrance wrote: post #418

I've seen many people saying, on this site and others, that they "believe in markets", as if it was their profession of faith. When markets are allowed to work "normally", this is what always happens: regulations are lobbied to the ground, resources get depleted, profitable companies get destroyed to make a quick buck and everyone is worse off in the long term. Having a strong economy is sadly harder than letting the…

Market economies destroyed the wildlife fauna of North America. It's incredible when you see photographs of what used to exist here.

At least north america has some wild places and animals left. In most of europe there is almost nothing left. We destroyed everything.

Re: The fishy death of Red Lobster

#424

Post by pfannkuchen »

moralestapia wrote: post #408
neom wrote: post #393

I went to red lobster in Toronto yesterday as a "lets save red lobster Canada" idea I had in my head, they came to Canada the year I was born and my dad was obsessed so I have a lot of nostalgia. Came out thinking: let em burn. Worse than mediocre rubber for $200 after tip and tax.

I had a really bad dining experience the one single time I went to Red Lobster; happened at the same place probably (Toronto, the one in Bay Street?) hence why I want to share. I came in to the restaurant and there was no one at the front desk, but the place seemed to be operating normally so I just went on to seat at the nearest table I found. Waiters just started ignoring me; at some point I realized this was on pu…

I think depending on staffing levels a restaurant at certain times does not have the capacity to handle all of its tables and so some are considered inactive. If you sit at a table that is not active it would be treated as equivalent to not sitting at a table at all.

It seems like once the bouncer types got involved they thought the reason you were ignoring their system might be because you were crazy or high and they might have to kick you out. Once they determined you weren’t either of those they accommodated you.

Chain restaurants especially seem to be very process oriented and the staff would not be as good at improvising as those at a local place.

Re: The fishy death of Red Lobster

#425

Post by JohnFen »

johngladtj wrote: post #398

I'm continually amazed by how much outrage normal and perfectly reasonable business strategies generate in the general public. None of this is unusual or in any way wrong. Red lobster (and olive garden) were mismanaged, and the investment funds were right about that. Their attempts at salvaging the situation were perfectly reasonable, even if they were ultimately unsuccessful. You're welcome to be outraged, but that…

> I'm continually amazed by how much outrage normal and perfectly reasonable business strategies generate in the general public.

The general public doesn't give a rat's ass about business strategies and nor should they.

If you really enjoyed patronizing a particular business and then they go out of business or change in such a way as to remove what you enjoyed, you're going to be a bit upset about that regardless of how sound the business decision was.

Re: The fishy death of Red Lobster

#426

Post by ninininino »

Yujf wrote: post #423
ninininino wrote: post #421

Earlier quoted context omitted.

Market economies destroyed the wildlife fauna of North America. It's incredible when you see photographs of what used to exist here.

At least north america has some wild places and animals left. In most of europe there is almost nothing left. We destroyed everything.

Yes, if I were European I'd be prioritizing the hell out of protecting the remaining Old Growth forest in Europe in the south east, even if it means having the EU fund nature preserves / paying those host governments big bucks to have a ton of rangers there to stop logging.

Re: The fishy death of Red Lobster

#427

Post by moralestapia »

pfannkuchen wrote: post #424
moralestapia wrote: post #408

Earlier quoted context omitted.

I had a really bad dining experience the one single time I went to Red Lobster; happened at the same place probably (Toronto, the one in Bay Street?) hence why I want to share. I came in to the restaurant and there was no one at the front desk, but the place seemed to be operating normally so I just went on to seat at the nearest table I found. Waiters just started ignoring me; at some point I realized this was on pu…

I think depending on staffing levels a restaurant at certain times does not have the capacity to handle all of its tables and so some are considered inactive. If you sit at a table that is not active it would be treated as equivalent to not sitting at a table at all. It seems like once the bouncer types got involved they thought the reason you were ignoring their system might be because you were crazy or high and the…

>they thought the reason you were ignoring their system might be because you were crazy or high and they might have to kick you out

Yeah, that's exactly the kind of dining experience I want when I go out. /s

Re: The fishy death of Red Lobster

#428

Post by tracker1 »

hnthrowaway0328 wrote: post #400

Unfortunately in the late Capitalism that reads more like Feudal than Capitalism, there is not much we can do, and so be it. There is a time that all shall burn and rot and a new world may come forth.

I think that if ever founding another company, will definitely have corporate bylaws that resist similar strategies, as well as cap executive pay per year to a max multiplier of lowest and average salaries in the company.

Re: The fishy death of Red Lobster

#429

Post by kadoban »

jonhohle wrote: post #415
margalabargala wrote: post #407

Earlier quoted context omitted.

> None of this is unusual or in any way wrong. You're completely correct. Everything described in the article was completely legal. The things that are illegal, like overfishing protected waters, the company doesn't do. Instead, they lobby to make it legal, then do it. See, all above board. It's all legal. Why would anyone get upset about a company that isn't breaking the law? If it were wrong it would be illegal, ri…

While maybe not illegal (yet), there is a lot of deception of retail investors throughout the process: * astroturf campaign against the company * fake boost in profits from massive asset liquidation Once the stock is run up, equity cashed out leaving morons who only had access to financials and not “the plan” holding the bag. It smells like a combination of fraud and insider trading, but perhaps the SEC can name it s…

> perhaps the SEC can name it something more appropriate

They can name it "what half of our employees did before working here".

Re: The fishy death of Red Lobster

#430

Post by habitue »

I think the author has a hard time trying to put a "why should we care?" spin on this at the end: Middle class families need a nice night out, and red lobster is the best way to do that!

Totally agree that this is vicious jackal like behavior by the PE funds. But as others have said, this is the lifecycle of a dying company. If red lobster's share prices were high because they were extremely profitable and everyone loved the restaurants:

A) it'd be too expensive for PE to buy up a controlling share

B) The smart move wouldn't be to strip the company for parts, the smart move would be to keep running the business well and soaking up the cashflows

This stuff happens to a limping company and the PEs are the wild dogs picking off the old weak corporations.

I think articles like this are pulling a switcheroo where it gets you to engage your moral indignation emotions and aim them in defense of a corporation. Those emotions are appropriate if we're talking about a human being, but aren't when we talking about a company. Imagine a PE fund doing some equivalent to an elderly person, that would actually be outrage worthy! This is just corporate finance, don't let it get to you.

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