Private equity, endless shrimp and Red Lobster’s decline

Make Me Smart May 22, 2024 Transcript

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Kai Ryssdal 

All right, then. If that’s what we got.

Kimberly Adams

This is what we got.

Kai Ryssdal

Drew.

Kimberly Adams 

Hello everyone. I’m Kimberly Adams. Welcome back to Make Me Smart, where we make today make sense.

Kai Ryssdal 

I’m Kai Ryssdal joining us. Thanks for joining us. Sorry, I’m a little out of practice. I’ve been gone for a couple of days. Also, I was going to say something else, but I don’t know what it was. Wednesday 22nd of May. Sorry. We’re going to do some news then some smiles, and we’ll get out of your way. Ms. Adams, what do you got?

Kimberly Adams 

Well, first of all, welcome back.

Kai Ryssdal 

Thank you very much. Clearly, I’ve lost the magic touch, whatever it was,

Kimberly Adams 

Well, so has red lobster. I’ve been watching with great fascination the fall of the American icon that was Red Lobster. The source of graduation dinners and family gatherings that on the fancy side for many a middle-class Midwestern family, my own included. Growing up, it was very fancy going to Red Lobster. My sister had a job at Red Lobster at one point before she went to school. And so, it’s been a little nostalgic and kind of sad watching the demise of this company. And I remember when I first started seeing headlines about it, everyone was like the Endless Shrimp did them in. And true. The Endless Shrimp promotion definitely gave a very hard time to the servers. And there’s a story in Slate with just some horror stories from some of the servers talking about people coming in ordering 16 or 30 rounds of you know, of shrimp when you know, you’re only paying 20 bucks, and you can keep eating and so people were sitting there for like $400. One of the servers in this story was quoted as saying, “I usually made $200 a night before Endless. Once it became a thing, I was down to $90.”

Kai Ryssdal

Really. That sucks.

Kimberly Adams

Yeah, and one of the stories that they include here about “Josie, 19, who asked to be anonymous, worked at a (now shuttered) Kansas City Red Lobster, where she watched a solo diner take down 30 orders of fried shrimp within four hours. According to the nutritional information on Red Lobster’s website, that’s something like 14,000 calories.” And not to mention the fact that they’d end up fighting with customers about like, oh, can you share the shrimp with other people at your table. So, first of all, be nice to servers at restaurants, folks. Don’t be that person. And you know, but all of this is set up to say this is not the real reason that Red Lobster went under. And Eater has a really good article about this with a headline in fact. “Red Lobster’s Demise Was Never About the Endless Shrimp.” And so, it said, “Red Lobster has had a really rough last 10 years, maybe even worse than the rest of us; since 2021, the chain has had five different CEOs. In 2014, its parent company Darden sold Red Lobster to,” wait for it, “a private equity firm called Golden Gate Capital for $2.1 billion. That sale helped Darden pay off” some debt blah, blah, blah. “Red Lobster continued to struggle. Following the sale of Red Lobster to Golden Gate, the chain’s real estate assets were also sold off, which meant that the restaurants now had to pay rent on these locations to their parent company. As such, the company was stuck in leases for underperforming restaurants that it couldn’t afford. As with other private equity forays into industries like retail and cough media, Red Lobster’s new private equity owner saddled it with tons of debt.” So, when you hear this narrative about, oh, the Endless Shrimp did in Red Lobster. No, that’s not it. It’s having their property sold out from underneath them having to rent it back in a very challenging environment for restaurants. So, I just thought it was super fascinating.

Kai Ryssdal 

No, it’s a good story, and it’s a great cautionary tale of read beyond the headlines people. Read beyond the headlines.

Kimberly Adams

Yeah. Yeah. For sure. What’d you got?

Kai Ryssdal

Okay, so look, I don’t know how to say this. But American voter, this one is on you. It’s a new Gallup poll out today from The Guardian. Sorry, not Gallup. It’s Harris in The Guardian about how people are feeling about the economy. I don’t even want to die. I’m going to read some statistic statistics, and then we’re going to have a little chat, American voter. You’re going to have a little chat. 55% of people in this country believe the economy is shrinking. 56% think the United States is in a recession. Okay. 49% of people believe the S&P 500 stock market index is down for the year. Here is the reality on each of those things. 56% in the United States say the US is in recession. We’ve had seven straight quarters of positive economic growth. Seven straight quarters, almost two years. 49% of you stay stocks are down year to date. The S&P 500 is up 12% year to date. You guys have to take some responsibility for knowing what’s going on in the economy. I cannot do it for you in half an hour every single day. You have to pay attention. You have to pay attention. That’s it.

Kimberly Adams 

I’m furiously typing over here trying to find out. Yeah, I figured this was about right.

Kai Ryssdal 

Yes, it’s a political breakdown, right?

Kimberly Adams 

Well, actually, what I was looking for was what percentage of Americans watch Fox News.

Kai Ryssdal

Yeah. Yeah.

Kimberly Adams

43% of Americans, according to Pew say they trust Fox News for political and election news, right? And Republicans trust it more than most other outlets. I agree that people need to take responsibility for, you know, getting information from reliable sources. But when you have people with very, very large platforms actively telling you that the economy is doing terribly despite all the data to the contrary. And we have more mainstream media who predicted a recession endlessly for months that never materialized. I also think there’s a big chunk of this that falls on the responsibility of the media.

Kai Ryssdal 

Yeah. So, look, I don’t think you can actually call Fox media, a news organization, number one. Number two, here’s my riff on being a responsible and formed informed voter in a representative democracy. And I know I’ve said this before. If you read the New York Times editorial page, you must read the Wall Street Journal editorial page. If you watch Fox News, you must watch MSNBC or better yet, find someplace in the middle and do that. It’s I think it’s actually a cop out to let people say, oh, I watch Fox News, and this is what Fox News is telling me. We know that they’re not purveyors of truth, right? And it affects this country in deep and disproportionate ways. You have to be a responsible and informed voter.

Kimberly Adams 

True, and what happens when people are not?

Kai Ryssdal 

Well, then we get what’s happening in this country today.

Kimberly Adams 

And so, I guess, I don’t know what benefit we gain from telling the people who are choosing to trust sources that are lying to them for trusting those sources. Okay, we can tell them not to trust those sources. But then what right? They’re going to say, well, we don’t believe you. We believe this other source. And you know, we were on Decoding Democracy with Lily and I the other day talking about how to speak to your family about mis- and disinformation if you have a family member who falls victim to, you know, some of these false narratives. And it takes so much time and effort, according to the experts on this topic, to change someone’s perspective. And one of the things that does not help is just straight out telling them that they’re wrong, and it’s their fault that they’re wrong. What actually helps is to find common ground and to, you know, approach people with a sense of inquisitiveness about why they trust that source. Why do they believe that? What other evidence are they looking at? And, you know, not that we want to coddle people or, you know, give people a pass for, you know, blindly trusting, you know, unreliable sources, but just telling them, hey, this is all BS, isn’t helping anything because we’ve been doing this for years now, saying that these sources are not true. These people are lying to you. So, we have to try something different. And I suppose that’s why I hesitate to jump on this bandwagon of yes, it’s all about personal responsibility. When you have people extraordinarily well trained to manipulate people in their most vulnerable areas. Some of that has to be on the rest of us to try to compensate for that as well. Anyway, that was my rant.

Kai Ryssdal 

Yeah, no. Look, those are all fair points. I’m just tired of coddling people who are being misled by people who are operating in bad faith.

Kimberly Adams 

Yeah, it’s really frustrating. And every time I go someplace, and I encounter someone who’s just repeating these false narratives, I often ask the question, is there any information from any source that would make you change your mind? Right? And usually, the answer is no. Or the answer is only if I hear it from Trump himself, right? And that does no one any good. And it is disheartening, and it is frustrating. But I also feel like we have to still push to try to make it better because this is the alternative. You end up with half of a country believing a completely false narratives when we just say, hey, it’s on you to get it right.

Kai Ryssdal 

Yeah, so, we’ll put that Decoding Democracy thing on our show page, and you can give a list.

Kimberly Adams 

Yeah. Oh, yeah, we need our smiles now for real. That was grim. Yours is very entertaining.

Kai Ryssdal 

Oh, my God. Are you kidding me? Do you want to do the pitch first? Let’s do the pitch first. And then we’ll end with the smiles.

Kimberly Adams 

Okay, sure. All right. So, the pitch is that we need your money because we are out here trying our very best to give people accurate information. And as I was saying yesterday with Lily, when we get something wrong, there are consequences for us, right? And we hold ourselves to very high journalistic standards. If we get something wrong, we try to let y’all know right away and fix it. When we are putting together our stories, we’re putting them through multiple levels of fact checking and trying to make sure that we are balanced and fair, not both sider isms, but at least fair, right? But all of this stuff does take money to do. It takes time to do. And it takes a giant team of people who you don’t get to hear on air the way that you hear me and Kai. So, before this Memorial Day weekend, we would really appreciate it if you’d participate in the last few days of our May fundraiser. It at midnight on Friday, and we’re behind. We have about $85,000 left to reach our goal by then, but we truly believe that we can do it, especially if y’all help out. We’ve done it before. We can do it now. And it happens when everybody chips in what they’re able for what you value.

Kai Ryssdal 

You all being informed news consumers know that times are tough in media and revenues are down. And anything you can support us with is especially valuable, marketplace.org/givesmart, or there’s a link in the show notes. You can do it there as well. Okay, now let’s do the smiles.

Kimberly Adams 

Okay. Well, I’ll go first because yours is more entertaining. Mine is interesting. So, it’s a story in The Daily Beast about how the WNBA has teamed up with high fashion. “It’s a slam dunk” subhead, “led by players including Caitlin Clark, A’Ja Wilson, and Kelsey Plum, the WNBA team members are wearing some sharp looks with major fashion labels courting them for clicks and sales.” We’re talking Prada. We’re talking Louis Vuitton. We’re talking other designers who are famous, but I don’t know about them. And you know, it makes perfect sense because what are supermodels? Very tall. What are WNBA players? Often very tall and very athletic. And they are rocking these looks. But what I love most about this is the way that these women are upending some of the stereotypes about what it means to be a strong, athletic woman. Right? Because for so long, there’s this image of if you are a woman who plays sports that you cannot also be beautiful and feminine and put together. It’s this like tomboy stereotype. Not that all those things can’t exist together. But I really love the way that these women are A.) getting their bag with these deals, and B.) just slaying with these looks and looking so good. And, you know, changing the narrative in so many different ways. So, love it.

Kai Ryssdal 

Look, women’s sports are number one amazing. Number two, there’s so much money to be had people, and it’s so great for younger women, especially women in high school and college coming up seeing this now actually catching on at the professional level. It’s really cool, I think.

Kimberly Adams

Yeah. All right. Let’s do yours.

Kai Ryssdal 

So. God, you got to feel bad for Rishi Sunak. So, Rishi Sunak is the Prime Minister of the United Kingdom. He is tail-end Charlies in 14 years of conservative government rule over there. He has to have called an election by January of next year. Today he came out in front of number 10 Downing Street on a podium that somehow did not have the Prime Minister’s seal or any kind of regalia on it, stood there and said, “We’re going to have a snap election on July the fourth.” And it started, excuse me, pouring rain on him. And the poor guy is standing out there in a suit and a tie and a podium and just getting completely drenched. There’s a protester across the street on Downing Street playing the anthem that the Labour Party played 14 years ago, whenever it was, that Tony Blair led the liberals in an election, and you could barely hear what poor Rishi Sunak was saying if you were in the crowd. It was unbelievable. I feel so bad. So, he’s going to get trounced, right? I mean, the conservatives are going to get absolutely trounced. But oh, man, just look at the pictures. He’s like a drowned rat. His suit is ruined. Oh my God. Oh my God.

Kimberly Adams 

Like, could nobody help brother out with an umbrella? I know they have umbrellas in the UK.

Kai Ryssdal 

It’s a rainy country. They know what to do in the rain. And yet, here’s this poor guy out there. Oh man.

Kimberly Adams 

Although I suppose that would have been even worse optics to have him standing out there with someone else holding an umbrella over him. He could hold his own umbrella.

Kai Ryssdal 

He could hold his own umbrella but, you know. I mean, when American presidents go out there, there’s a Marine holding umbrella or a secret service guy holding an umbrella. I mean, you know, it just you know. Poor bastard. Poor, poor bastard.

Kimberly Adams 

And now we have the E rating. Thanks Kai.

Kai Ryssdal 

I know. I know. Well, yeah, I gotta spice it up a little bit.

Kimberly Adams 

Anyway, that is it for us today. We are going to be back tomorrow. Until then send us your thoughts, questions, donations and comments. You can reach us at makemesmart@marketplace.org. Or leave us a voicemail at 508-U-B-SMART.

Kai Ryssdal 

Yeah, I just realized I did that pitch out of order. Ah well. Ah well.

Kimberly Adams

It worked.

Kai Ryssdal 

It did work. Make Me Smart is produced by Courtney Bergsieker. Ellen Rolfes writes our newsletter. Today’s program was engineered by Drew Jostad. Thalia Menchaca is our intern,

Kimberly Adams 

Ben Holliday and Daniel Ramirez composed our theme music. Our senior producer is Marissa Cabrera. Bridget Bodnar is the director of podcasts. And Francesca Levy is the executive director of Digital.