Red Lobster is getting tossed overboard. The parent company, Darden Restaurants, announced that it’s selling the seafood chain for $2.1 billion. Both Red Lobster and Darden’s other big chain, Olive Garden, have been losing customers for years.
Casual dining faces two problems, says David Henkes of the food-industry consultancy Technomic. “It’s certainly getting squeezed at the higher end by more of a ‘polished-casual’ as we would call it,” he says. Think Cheesecake Factory. “And then at the lower end, you’ve got an extremely high-quality fast-food segment that we call fast-casual. You think Panera, Chipotle.”
Panera and Chipotle give consumers two things, says Harry Balzer, who looks at food and drink for the consumer-research firm NPD. “It’s time and money,” he says. “Save me time, save me money. And this country has been under pressure, for its income, for a number of years now.”
Consumers have been eating out less often, he says, to save money. Minding the size of the bill counts, too: An average check at Red Lobster is about twice the average tab at Chipotle.
Increased global demand for seafood has made it harder to contain costs, says Andy Brennan, a restaurant analyst at IBIS World. "Seafood is one of the foods that you can't substitute out for cheaper products," he says.
That's the money side. With time, casual-dining restaurants like Red Lobster fare even worse, compared with their fast-casual competition, says Alex Susskind, a professor of food and beverage management at Cornell University’s School of Hotel Administration.
Compared with fast-casual, an average party spends more than twice as long at a Red Lobster: 45 minutes to an hour. Even for family dining, that’s a stretch. “When I go out with my family— I have two young kids,” he says, “And if we could get out in 35 minutes, that’s better.”
Olive Garden has all the same problems, but Susskind says Red Lobster has an additional burden: demographics. “It’s still perceived as a restaurant your grandma went to.”
Even attempts to update the decor— like putting the bar front and center— haven’t helped with that. "It's just that older demographic— that is the bread-and-butter, I guess, of their existence— that prevents that younger demographic from moving in," he says. "In terms of problems, they probably saw that as something insurmountable, given the number of years they've been trying to adjust it."
DNA from a 12,000-year-old skeleton of a teenage girl found in a cave in the Yucatan Peninsula shows the same markers found in modern Native Americans.
Exec to bankers: stop being jerks
I always read All Staff emails. Especially the ones about a misplaced umbrella somewhere on the West Coast (I’m in NY) and definitely the ones about free cookies in the lunch room in Minnesota (I’m still in NY).
Some people ignore all staff emails. So Colin Fan, co-head of Deutsche Bank’s investment banking unit, made his into a video.
“This is an important message. You need to pay close attention,” he begins.
“You may not realize it, but right now, because of regulatory scrutiny, all your communications may be reviewed. This includes your emails, your conversations, and your conduct. All of this is open to scrutiny. Some of you are falling way short of our established standards. Let's be clear. Our reputation is everything. Being boastful, indiscreet and vulgar, is NOT OK. It will have serious consequences for your career. And, I have lost patience on this issue.”
Fan concludes ominously with “Think carefully about what you say, and how you say it. If not, it will have serious consequences for you personally.”
So why the... gentle reminder? Because a lot of financial firms have an enduring problem.
Text not lest ye be judged. And email not. And gchat not.
“We’ve seen time and time again these emails, which are meant to be private, don’t stay private,” says Kevin Roose, author of Young Money.
As investigation after investigation has turned up documents and texts and even recorded conversations, these communications have not been flattering. Some were illegal, others crass, plenty were both and ALL made the firms look terrible. You can see some juicy ones here.
“Not just during the financial crisis but also things like the LIBOR scandal last year,” says Roose. “Traders were emailing back and forth about fixing a key interest rate in exchange for bottles of champagne and calling each other nicknames.”
“What’s astounding,” says Roose, “is that people are still doing this kind of thing.”
In part, it’s the same mistake that anyone can make: what you put in writing can come back to haunt you. But it’s also cultural.
A culture of high stress and hyperbole?
Henry Blodget is currently the editor of Business Insider, but he spent a decade working on Wall Street
“On trading floors in particular, and among people on Wall Street in particular, there’s a lot of tension, a lot of jocular communication, yelling and screaming, gamesman ship. It lends itself to the very colorful emails and texts we have seen,” says Blodget. It’s akin to other hyper masculine cultures, like that of the military. “As an analogy, if you were to put a microphone on the side line of a football team, you would hear many things that in isolation would sound terrible – ‘our coach is an idiot!’ and ‘That’s the dumbest play ever’ – imagine that in a deposition. Imagine a prosecutor asking you on the stand ‘so clearly, you think your coach is an idiot?’ It’s hard to explain yourself later.”
And yet, says Blodget, in the case of the financial industry, the jocular, aggressive culture is increasingly subject to withering scrutiny: “Because even conversations are recorded on the trading floor, you can’t even engage in normal banter that you normally would. It’s hard because you want to talk to people who you want to be friends with, you want to talk the way people talk.”
...Or a culture that promotes recklessness?
That scrutiny is well deserved, says Karen Ho, an anthropologist at the University of Minnesota who has spent years studying, working, and socializing within the finance industry and on Wall Street in particular. “These folks have undue influence in our social economy, in our institutions, on interest rates.”
Moreover, the jocular culture is far from harmless, argues Ho. “The boasting and vulgarity help to create a perverse motivational environment where traders through their talk their texts their emails their yelling are egged on” to be more transgressive.
Transgression and aggression become “a sign of not just one-upmanship, but masculine achievement,” Ho says. Blaming Wall Street excesses on greed lets culture off the hook. Ho is basically saying that Wall Street culture as it stands reinforces an unholy marriage between masculinity and prowess, and aggression and transgression. “We need to delink these things, which I think the Deutsche Bank video begins to do,” says Ho.
“The good news is that if it’s cultural, and folks are socialized into it, then hopefully they can be socialized out of it,” she says. Canadian bankers don’t seem to have the same problems.
Cultural shift is easier said than done
“I think it’s extremely challenging to imagine that people closely working every day on the phone and instant messaging and email will ever be able to communicate in the boring stilted corporatese that sets lawyers at ease,” says Blodget, regarding the effort to reign in distasteful communication.
But some financial firms are nevertheless trying very hard to do a la DeutscheBank. Goldman Sachs installed a filter to prevent people from sending emails with cursewords. “You can’t even send ‘wtf’” says Roose. “They installed willpower via software.”
Roose says a shift in culture has to come from the top.
And to really make its mark, it will probably require people getting fired. From the tone of that Deutsche Bank all-staff memo - that sounds pretty likely.
U.S. sales of sugared and diet sodas have slumped. So soda-makers are trying to win back consumers with new flavors and less sugar. But historically, midcalorie sodas haven't sold very well.
In India on Friday, Narendra Modi claimed victory as the country's next prime minister. It's a big win for his Bharatiya Janata party, which is expected to take control of Parliament.
India's long-ruling Congress party is out: it has been swept away, says Sruthijith KK, by a new wave of pro-business sentiment.
"The [Bharatiya Janata] used to profess a very different kind of economics early on," says KK, the New Delhi-based Indian editor for Quartz, "which focused on self-reliance and boycotting American products, but Modi has completely changed that economic philosophy. He has modeled himself off Reagan or Thatcher, and that is very reassuring to business men."
Modi's origin story is straight out of a Horatio Alger novel. Growing up he sold tea at railway stations to make ends meet. KK says his rise from obscurity is an inspiration for India's urban youth, fed up with a lack of jobs and stagnant economic growth.
"The changing demographics of India is precisely what has delivered a thumping victory to Modi... His pitch has been we need to get rid of Welfarism. Growth will pick people up from poverty."
In looking for a Prime Minister, KK notes that Indians put a premium on someone who could cut through the country's enormous amount of red tape.
"In Gujarat Modi showed he could make the bureaucracy work...the size of mandate that the people have now given him gives him so much stature that people expect he'll be able to push through things. He'll get the bureaucracy to deliver what needs to be done."
Europeans now have the right to have search results about them deleted from online databases. But legal experts say each of the EU's 28 countries could interpret the decision differently.
Barricades in the eastern Ukrainian town of Mariupol have been dismantled, following a deal between separatist leaders, police and steelworkers from the city's biggest steel mill.
Transportation Secretary Anthony Foxx has announced that General Motors has entered into a consent decree with the U.S. government, a response to how the company handled its ignition switch recall. As part of the agreement, GM will pay a record penalty of $35 million.
John Laird, the secretary of the California Natural Resources Agency, discusses how to fight fires differently, as well as the role climate change may play in the frequency of fires in California.
The federal Medicare program for the elderly and disabled will cover two new drugs that can cure hepatitis C, a liver disease that can cause cancer and lead to death. The drugs are very expensive, but they cure hepatitis C in most cases. The government and insurers are concerned about these costs; three million Americans have hepatitis C, most of whom don't know they have it.
After several weeks, India's parliamentary elections have finally finished. Voters swept opposition leader Narendra Modi into power as prime minister, voting for the Hindu nationalist party he leads.
Wildfires are burning in California's San Diego County. Megan Burks of KPBS says that one person has been killed in the blaze, and high temperatures are frustrating containment efforts.
As President Nixon's deputy campaign committee head, Magruder helped authorize the unsuccessful break in of the Democratic National Committee's headquarters on June 17, 1972.
GOP Gov. Tom Corbett is using a populist attack against Tom Wolf, the businessman who is leading the Democratic field in the May 20 primary.
From the Marketplace Datebook, here's an extended look at what's coming up next week:
Students from around the country are in Washington to compete in the annual National Geographic Bee championships getting underway Monday.
Look over your financial plans because Tuesday is Be a Millionaire Day. Something I think most of us like to think about. At least how we'll spend it.
Also on Tuesday, the Senate Health, Education, Labor, and Pensions Committee holds a roundtable discussion on economic security for working women.
Toward the end of the week, we get some reports on housing for April: Thursday, the National Association of Realtors reports on sales of existing homes. Friday, the Commerce Department issues data on new home sales.
And before you vanish into your three-day odyssey of BBQ, beaches and beer for Memorial Day weekend, let's land face up on National Lucky Penny Day.
That's right, pick that lucky penny up: you're working toward being a millionaire, after all.
The resignation of the department's undersecretary for health comes a day after he and VA Secretary Eric Shinseki testified before Congress.
To no one's surprise, online sales in the U.S. are continuing to steal a larger and larger share of the consumer market, and expected to hit $370 billion by 2017. Even though the overwhelming majority of stuff is sold offline, where you shouldn't shop for the latest Game of Thrones novel in your underwear, brick-and-mortar retailers are still doing everything they can to move into that still growing market. Here are five big stores that have said they are moving to become a bigger presence in the online market:
Staples is really feeling the pinch from online retail. According to its chairman, Ronald L. Sargent, online retail is the main reason Staples will close nearly 225 stores by the end of 2014. And with the closing of so many physical stores, Staples is trying to make sure it dominates the online office supply market. Already, online orders make up nearly half their business, and Staples now offers 500,000 products on its website, rather than the 100,000 offered just a year ago. It even acquired Runa, a tech company specializing in e-commerce personalization. However, investors might be wary of Staples' new direction, as its stocks fell 15 percent in one day when the company announced it would close stores.
Amazon is still the king of selling everything you could possibly want over the internet, but Wal-Mart, known for its gargantuan stores in real life, could be closing the gap. In 2013, Wal-Mart’s online sales grew faster than Amazon’s for the first time. Wal-Mart’s had to invest heavily to catch up to Amazon, acquiring 12 tech companies and building a presence in Silicon Valley. But even though Wal-Mart is growing faster than Amazon, it’s still a world away. Just look at the numbers: While Wal-Mart racked up $10 billion dollars in online sales over 2013, Amazon took in $67.8 billion.
The Apple Store might be the shiniest place in the mall, but Apple’s online store might be even shinier -- metaphorically, that is. That’s because Apple is the second largest online retailer in the U.S., right behind Amazon. Factoring in the App store, iTunes, and sales of Apple’s hardware at Apple’s website, Apples pulls in $18.3 billion in online sales. It’s not that Apple doesn’t still value it’s retail stores; they’re doing very well. But for the first time in Apple’s history, one person is being put in charge of both the online store and the retail stores, which is supposed to bring more collaboration between the two entities. As it is now, Apple’s online and retail aspects are both extremely successful, leaving Apple in a pretty sweet spot.
According to its CEO, Best Buy is now an “online first” retailer -- as opposed to being a "showroom" when shoppers would browse Best Buy first, and then actually buy their electronics online. They’ve even hired a handful of tech people to update their decade-old (yup, decade old) website. They’ve also instituted a loyalty program that works with their website and started a big-data mining project called Athena to get customer information for a more focused experience. Perhaps most notably, they’re using innovative methods to attempt to get products to shoppers faster than Amazon. This is all in an effort to double their online sales, and hopefully compete in a market that may have left them behind.
With the public relations fallout from a huge data breach as well as an employee rant going viral on Gawker, Target is in a pretty bad place right now. But the company is hoping a push toward online retail could help turn things around. It’s experimenting with Google to deliver same-day shipping, and it’s significantly expanded its online subscription service. However, if the anonymous employee rant is anything to go by, they have a long way to go.
Patrols of miners and steelworkers, urged on by Ukraine's richest man, have forced pro-Russian partisans to end their occupation of some areas.
The cat that saved a young boy from an attacking dog became an Internet star this week. Next week, we'll see how Tara the cat does on the ball field.
There's a long history of prejudice against the Roma people in Europe. A non-profit in Slovenia is hoping to diffuse it by launching a restaurant serving the tastiest of the traditional Roma dishes.