May 16, 2024 • 24 mins
Olive and Kayla, MBA students at Feliciano School of Business, discuss re-commerce in giving products a second life. Plus, discover how advancements in AI can improve customer satisfaction and ultimately reduce returns. Tune in to this episode and be part of the exploration into the latest business news!
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Speaker 1 (00:00):
Hey girly, how have you been what's new?
Speaker 2 (00:04):
Don't ask me that till the end of the semester,
please, because I'm not sure youknow.
Speaker 1 (00:09):
Two weeks, yeah, almost there.
Speaker 2 (00:11):
Almost there.
I'm very excited, I think.
I just don't want to check inwith myself until it's over,
because I'm not sure.
Speaker 1 (00:18):
But there's no break, there's no break.
Speaker 2 (00:19):
There's no break.
We're going right into it,right Straight into summer.
Speaker 1 (00:23):
Wow Session.
Speaker 2 (00:24):
I'm more curious about what's going on with you
lately because I know it's day.
What of eating Is day how?
What if?
Speaker 1 (00:34):
there's food at the crib.
There's day, it's day 23.
Okay, of eating at home.
Okay, it's been a struggle.
Okay, trying to save a littledollar, trying to eat healthier.
Speaker 2 (00:48):
What do you miss the most?
Speaker 1 (00:49):
I think, the convenience.
So I have to go to the grocerystore, I have to plan what I'm
going to eat when I wake up late.
I still have to try to packbreakfast lunch snacks, the
dishes, breakfast lunch snacks,the dishes.
So I don't know if it's worthsaving a dollar for me not
having convenience.
Speaker 2 (01:10):
Let's talk about that , though, because I'm still
trying to figure out somethingreal quick.
Maybe you can help me out.
I don't know if they tried tosave a dollar, if they didn't
save enough dollars.
Speaker 1 (01:25):
Have you heard about red lobster lately?
So I did.
Speaker 2 (01:28):
I've never been, never been, whoa but never one
time, not even after the grocerystore, so maybe I have been
indirectly okay I went withoutgoing.
Speaker 1 (01:40):
But yeah, so isn't it about their endless shrimp deal
that is causing them to?
Speaker 2 (01:46):
absolutely go into bankruptcy.
So they actually, um, at aquarterly loss of 11 million,
are now contemplating a chapter11 bankruptcy, and it's kind of
fascinating because it's beingon the other side of that.
We always like we want that tolast just forever.
I mean, you want to gosomewhere, get endless anything
(02:07):
for $20.
Everything is like it costs.
It costs about that to breathethese days.
So I'm like, yeah, let's dothat.
But they did it to a point where, um, their biggest uh
manufacturer, manufacturer,their biggest supplier of
seafood, is now kind ofstrategizing an exit because it
(02:29):
has no longer like a sustainablething.
On top of that, they also havehanded over their leadership to
a CEO that specializes in kindof trying to shift out of that
bankruptcy mode.
So I think it's serious.
It's a serious thing.
You were talking aboutconvenience and you were talking
(02:50):
about saving a dollar.
I think that's really what RedLobster has come to signify like
over their legacy, becausethey've always been like an
affordable option for seafoodand I know that, like seafood
itself tends to have a higherprice point because of, you know
, several different competingfactors and Red Lobster was
(03:13):
always kind of an accessibleoption for blue collar families
and that's being threatenedright now and I'm kind of I'm
not sure how I feel about it,because I think it's I'm not
sure how sustainable that modelis going to be, as we kind of
are in the middle of thisinflation extravaganza right now
(03:34):
.
But I also think that itsignals so much more than that
with the dining industry as awhole.
Speaker 1 (03:45):
Yeah, I think that you know, even a few years ago
people would dine out for theexperience.
You know, I remember my mom andI we would go to Applebee's and
it wasn't necessarily about thequality of food.
It was like my mom and I areout on the town, it's a Friday,
you get the two for 20, you getthe appetizer with two entrees.
It was a great deal.
(04:06):
But then now I think people arequestioning is it worth it?
You know what has changed inthese dining experiences that
it's beyond just the same food.
You know people want more of anexperience and then, if they're
not getting an experience, theywant the convenience they want.
You know Uber Eats or DoorDashto kind of just drop off the
food.
You are at your home and yourown.
You know comfort.
So I think people go out, youknow, to dine in for special
(04:29):
occasions and if it's justsomething that they already know
it's like, why am I going tospend a pretty penny on
something that seems mediocreoverall?
Speaker 2 (04:40):
Well, that's the thing for me now with this whole
thing, because, yeah, it can bethe convenience, the experience
, but the notion of the value ofit is being challenged, I feel
like, not just because they'refacing this bankruptcy, but also
even eating at home is kind ofexpensive these days.
Right, I mean the experience nowis like I don't have to leave
(05:02):
my house and socialize.
Experience now is like I don'thave to leave my house and
socialize um, like if the pricesare kind of comparable, like
you're gonna maybe stay homeover doing the whole thing.
Speaker 1 (05:10):
But then it's also like how good is the endless
shrimp deal when it's on a perperson basis?
It's not per table, true andthen it's only shrimp.
That's not including the sides,that's true.
It's one of those things that Ithink it was a promotion to
really get people in the doorand then from there kind of just
hoping people would spend theirmoney on other things as well.
You know we've talked about thewhole thing with Costco and the
(05:34):
Roast to Street Chicken.
I remember you talking aboutthat.
It's, you know, a loss leaderin that.
You know the company doesn'tmind taking a loss on their
profits of the Roast to StreetChicken, knowing that people are
not going to leave justspending five dollars on that
trip.
Speaker 2 (05:47):
They're going to pick up the size, they're going to
pick up other things becauseit's convenient for them while
they're there and by the way,statistically, according to like
the floor plans of most costcos, you actually have to walk
through about 60 of the store toeven get to the chicken and and
it is kind of like situated bylike sides.
You know things that go goodwith chicken, you know.
(06:09):
But I will say one thing toyour point.
First of all, I love the wholeconcept of this Costco chicken
thing.
It's actually legendary, youknow, for those that are
uninitiated, you know, for 20years Costco's chicken has been
sold for $4.99.
Speaker 1 (06:30):
I love the consistency.
Speaker 2 (06:31):
Well, actually, that's actually what I'm getting
at, because the only time inthose 20 years that they have
raised the price was during the08 financial crisis.
Meanwhile last year 2023, whenRed Lobster started to kind of
realize that they were in bigtrouble in the first quarter.
With that, you know, I think onaverage I may or may not have
(06:51):
mentioned it was on average, 11million dollar loss.
So in the ballpark, you know,somewhere in the 40s, 40 million
dollar loss.
But when they did that, it itwas a $20 deal, right, started
to scramble a little bit, $22.
Then it by, I think.
(07:13):
I think they waited until thethird quarter to raise it to 25.
And then they said, okay, 25.
Speaker 1 (07:18):
For nationally.
Speaker 2 (07:19):
For on a national basis.
So not just that I don't knowif this makes sense, but having
all of that movement, I think,did more damage than good.
I think that at that point inthe game, cause the heat, cause
here's really what it is.
It was two factors, twocontributing factors.
(07:41):
One, once you stick with theprice, just just do that for the
sake of brand integrity, forthe brand image, Because, as Red
Lobster, as a trusted name inseafood purveyance or you know
whatever, and especially becausethey cater to blue-collar
families, just pick a price, youknow, because those few dollars
(08:02):
do affect their particular butI think it's also that they
extended the promotion beyondthe time.
Speaker 1 (08:10):
It was supposed to be a limited promotion, but then
it was like oh no, let's justkeep it, let's just have shrimp
all the time.
Speaker 2 (08:16):
Shrimpapalooza, guys, first of all.
That's like saying let's justhave the holidays all year round
, which I would love, but it'skind of like if every day was a
party.
Like I'm just tired thinkingabout that and I kind of feel
like it's the same thing, notjust for people, because people
can't do endless shrimp all thetime.
I feel like having that kind ofpromotional, that cyclical
(08:41):
approach.
Speaker 1 (08:41):
It would be like a motivation to come in during
that time.
Speaker 2 (08:44):
We know when Lobster Fest is, you know, you know
whatever, and then we go and Ifeel like it's it's giving like
shark week, but like for forever, forever we know when it's
coming, we all get ready for it.
So not just the fluctuation butthe taking away the seasonality
of it.
Speaker 1 (08:59):
It feels like a business that's unsure about
what they're doing and I I thinkthat that makes people nervous,
but I think it was also thecompany already being in turmoil
before this promotion, usingthis promotion as a means to get
some money in.
You know, help profits, butthen, kind of extending it, lost
its value of oh, this is anexciting time.
Let me go in during this andthey didn't I don't think they
(09:22):
actually did the financescorrectly to see oh, is this
actually profitable based off ofhow much shrimp costs and how
much people are generally eatingwhen they're ordering endless
shrimp?
Speaker 2 (09:31):
I mean because if you're going to have it all the
time, I'm going to plan to justgo and eat just shrimp, like I'm
not going to bother with therest of the menu.
But if it's like I'm goingthere because I know no sides,
them cheddar biscuits?
No, because like some peopleyou know that are students, they
might just go.
And here's my little creativetake Get a little cheddar
(09:54):
biscuit, cut it in half, make alittle.
There it is no sides.
So I think it gives people toomuch time to strategize how
they're going to get the mostbang for their buck, because
right now that's what it's aboutthere's too many competing
factors.
First of all, the eating athome, then there's the price of
groceries.
(10:14):
I mean, I don't know when allthings are kind of factored in.
You got to make it almost soundbetter than that.
Speaker 1 (10:23):
And if it was going to be be 25, it should have just
been 25 but I think it's alsolike the indirect competitors of
the role of DoorDash and UberEats is playing into the, I
guess, the eating experience Iknow for me personally, when
it's winter time I'm like I'mhibernating, I'll save my coins
(10:44):
for the summertime and I'll beout and about during that time.
So I'd rather just honestlytake my food to go and I don't
think people see places likeOlive Garden and Red Lobster,
Applebee's and Chili's as aplace like oh, let me order and,
you know, take it to go.
Speaker 2 (10:58):
You know it's one of those things that you're either
eating in or you're not eatingthere at all you know, and not
for nothing, like tippingculture is so out of control, so
I feel like that's anotherbarrier, but it's not just the
cost of the endless shrimp thatyou're paying for.
Speaker 1 (11:12):
It's yeah, you know, if you get anything else than
the tip and then you're like isit really a deal?
Speaker 2 (11:17):
I thought, let's talk a little bit about the shrimp.
So you know, standardizing itnationally.
I think there were someoversights in, like a kind of
the logistical situation becauseobviously if you're in the
Midwest, you're not by any typeof you know, and that's going to
take time, it's going to takepeople to, you know, make that
(11:41):
come together.
And if you're in a state, it'stwo things right, it's like that
part.
And then there's also the factthat if we have a standard rate
for something in a plate, ifpeople are being subjected to
national standard rate in placeswhere, say, minimum wage is not
keeping up with that, now yougot all this shrimp in the
(12:03):
freezer and you got nobody toeat it because really, like
what's going on in today's dayand age, I mean, a dollar is a
dollar, right, we know the valueof it, but more than ever the
difference between 20 and 25dollars, we see now that it's at
the detriment of thisdecades-long legacy and that
goes hand-in-hand with the pricesensitivity that you had
(12:26):
mentioned to me before this thatCostco tried to raise their
prices and they saw a hugedownfall of people getting their
rotisserie chicken because theprice went up.
Speaker 1 (12:37):
So it just shows how certain groups of people that
you're targeting are more pricesensitive to even a dollar fifty
or even fifty cents.
Speaker 2 (12:43):
You know well remember this was during the
financial crisis.
So from both sides, from theconsumer's perspective I don't
even have that dollar maybe butalso from their perspective like
they don't want to take, andit's kind of that they're
actually just a great example ofhow well the brand image was
(13:06):
handled, because they understoodthat that dollar was going to
turn into many more if they didnot honor, um, their customers
kind of willingness to, toparticipate that, you know, was
shown in the short term, though,because I think in the long
term, when people really comparetheir options of fast food or
(13:27):
dining out, they're like, oh,even if the Costco prices for
the rotisserie chicken went up,it's still relatively cheaper
than other things.
Speaker 1 (13:34):
You know, we've seen with the dollar store that has
gone up and it's no longer adollar, but people are still
going to the dollar storebecause, compared to the other
options, it's still cheaper thangoing to Target or Walmart or
other things like that.
So I think in the short term itmay be affected in the sense
that people are like, oh no, I'mnot doing this anymore, but
when you really compare overallprices, it's still going to be
(13:57):
cheaper.
Speaker 2 (13:58):
I mean, I agree.
I also do want to mention, onthe tail end of that, that you
know, I was kind of making thiscomparison as if we're so far
away from that place.
But we kind of are in afinancial crisis, like we're
living in a post pandemic worldwhere just things completely
went out of control.
And I remember even at a pointwhere, like where just things
(14:18):
completely went out of control,and I remember even at a point
where, like before, theinflation train kind of really
got chugging I heard the termlike price gouging going around
a lot because people were tryingto recoup their losses and
things like that and now it'sjust like rampant.
So I feel like people don'tknow where the line is and
people are kind of trying towalk that line between providing
(14:40):
that value and also making surethat they meet their, their,
their fiscal targets.
You know what I mean?
Um, I don't know, for me it'sit's kind of like a romantic
perspective, but I just feellike this is kind of one of
those things that is signalingthe death of the american dream
(15:03):
kind of thing, because I think,um, you know people that are
that have enough money to be outof touch, enough to say things
like we'll just stop eating outand stuff don't understand like
the social implication of thingsand that does affect the
economy on a larger scale, likebut I think it's also pushing
(15:24):
you know, especially restaurantsto challenge what they sell.
Speaker 1 (15:28):
You know you're selling food, but I think people
want more than that.
You know, and it's like whathave you really changed to your
business model and improving itin the last 20 years?
That's a great point.
It's like what have you reallychanged to your business model
and improving it in?
Speaker 2 (15:41):
the last 20 years.
That's a great point.
Speaker 1 (15:42):
It's just all the same.
Speaker 2 (15:44):
That's a great point.
Speaker 1 (15:45):
And I think post-COVID, people are really
questioning how they're spendingtheir dollars.
You know, you can either payfor convenience and Uber Eats
and DoorDash your food, oryou're like, oh you know what,
Let me just eat at home and savefor my experiences of vacations
or things that are going toactually fulfill me a little bit
more than you know some ofthese mediocre restaurants in
general.
Speaker 2 (16:05):
The way that even like McDonald's is priced right
now, I may as well just skip itfour times and then go to.
Speaker 1 (16:11):
Like it's crazy, Like go to some other country go eat
their food, their food, likethat applebee's would be giving
two for 20 and you get basicallythe appetizer and two entrees,
and now 20 that mcdonald'sdoesn't even take you anywhere
and you're not even.
You know being served by awaiter and having that
(16:32):
experience of sitting down andyou know kind of feeling catered
to and then the fact that youknow you were speaking about the
quality.
Speaker 2 (16:40):
I mean, the quality is just not what it was when it
was less, and I feel like peopleare just having a hard time
keeping up with paying more forand it's also interesting
thinking about how a lot ofthese um chains they have their
food in the grocery stores.
Speaker 1 (16:58):
So you know, if you think about it, you could find
tgi friday's wings right in thefreezer aisle.
You can find panera at, youknow, your grocery store.
So it's really like do I needto go to that place to get the
tgi friday's wings?
Speaker 2 (17:13):
yeah, you're right, and that's actually the thing
that red lobster wouldn't beable to sell, because, like just
shrimp, no one's gonna buy justshrimp.
That's Red Lobster at thegrocery store.
You know what I'm saying, likethey're not, look at the
seasonings.
That could be another way tosupplement their.
They did it with the biscuitsyou know, yeah, that's a really
(17:33):
Take no Red Lobster.
This one might save you here,this one might save you the
whole thing.
I think, um, what's interestingabout let's?
I'm gonna just pivot like inthe sense that, okay, costco and
red lobster, cool, but I wantto bring olive garden into this,
which?
basically yeah, first of all.
(17:54):
Uh, I don't think red lobsteris under darden anymore, but it
was.
Um, I forget his name, but Iknow his last name was Darden.
It's under this Darden umbrellaunder which exists Olive Garden
and a couple other partners Idon't want to misspeak started
(18:23):
as a family restaurant, andthese kind of approaches to
value are what kind of gavebirth to these other business
models that are like come eatwhatever you can and get, then
get on out of here.
The only problem is with OliveGarden, the price points are so
much like it's kind of almostthe same price point, but like
the margins are so much widerbecause like I mean it's pasta,
it's kind of almost the sameprice point, but like the
margins are so much widerbecause like I mean it's pasta,
(18:44):
it's pasta.
Yeah, it takes a lot to get meto go out and pay for pasta,
like you know what I mean, butit's like but even they have
like an all you can eat pastabowl, yeah, pasta soup and salad
, but that works for thosemargins.
With seafood it's a littleiffier.
And if you don't figure thatout, going into it while also
subjecting everyone across thecountry to, basically, you
(19:08):
expose yourself for not doingthe math all the way.
And if you couldn't do it, youshould have just kept it what it
was, because it's the money andthe brand image.
The money can't even reallyexist without that thing.
And because Red Lobster hasbeen around for so long, there
are certain expectations.
I think what it's going to taketo save Red Lobster is going to
.
First of all, you're so rightabout the lack of innovation,
(19:31):
but I don't think they've beenchallenged to do that in a long
time.
First of all, there's theappeal of the deal.
Right, there's the appeal ofthe deal right.
There's your target segment,which are blue-collar families.
If you lose that entry point,the people in that I don't want
(19:51):
to say tax bracket, but peoplelike you know in this particular
class.
Speaker 1 (19:56):
If you like.
Raise prices too much, you'relosing your initial target
market?
Speaker 2 (19:59):
You are, but then what does that mean for Red
Lobster, if it doesn't close?
Are you now going to appeal to?
Who are you going to appeal to?
Speaker 1 (20:05):
It's like you can still improve relatively.
Keep your same tax bracket,your same target market.
I guess you know.
But what improvements have youmade with all the profits that
you were making before ifeverything was the same?
You know like.
Speaker 2 (20:29):
End have you made with all the profits that you
were making before, ifeverything was the same?
You know, like endless crablegs were 2099 in 2003.
They didn't learn, so maybe itwas working, but, like you know,
I think it's maybe a lack ofawareness of how things are,
kind of proliferating as theworld becomes ever increasingly
digital.
There's all types of freeeverything on these little apps.
If you download our app, youget a free chicken nugget,
whatever.
I don't know if they can affordthat, being where they are.
I don't know if they cansurvive in this world, like how
(20:51):
it's kind of going now, becauseof all that you have to do even
just to remain relevant.
Speaker 1 (20:57):
I mean it is all and loyalty isn't the same with
these restaurants, and by theway, if the restaurant ain't
instagrammable, yeah they're notgonna experience, they're not,
yeah, like they're not gonna go,because now we have social
capital, it's more than just themoney, um, but they certainly
should have paid more attentionto theirs, so I think this is
why, like this month of me beingmore conscious of what I'm
(21:21):
eating, where I'm eating, howmuch I'm spending on eating out,
I have more of a focus oneating out as a here and there
type of thing, rather than, oh,I'm running late or I didn't
plan ahead of time, just beingmore conscious of what I want to
spend my money on when I dochoose to eat out and, um, yeah,
just, I think, being overallmore mindful of that.
(21:44):
And you know, sometimes it'snice to have one of those like
Chipotle meals and keep it going.
But overall I don't see myselfreally going to dine in places
like Applebee's or you know.
It's just like there's nothingthat I can't get at the grocery
store from the freezer aisle.
That you know would do the samething and cause a third of it.
And if I do go out to eat, Iwant more of an experience of,
oh, there's a nice view orthere's great customer service.
(22:06):
You know there's somethingspecial to that experience
beyond.
Give me a reason to put theoutfit on.
And the quality of food isdefinitely there as well,
absolutely.
Speaker 2 (22:15):
You said here and there.
I wish Red Lobster would havethought about that before making
Endless Shrimp be around.
Speaker 1 (22:25):
Took it away.
Speaker 2 (22:28):
Took that need away because it was always there,
yeah, and now they took it outcompletely.
Now they took it out completely.
So now we back to red lobster.
Come to the front, please.
Speaker 1 (22:36):
I just want to talk to you for a second so, based
off our discussion, what do youthink are the major takeaways
from red?
Lobsterfts are filing forbankruptcy.
Speaker 2 (22:48):
You know, I think this is kind of evidence of a
larger kind of shift where, likeyou said, we're wanting more
from institutions in general,like just the human experience.
I don't know if it's because ofCOVID, I don't know if it's
because it's just so expensiveto live, but people want, they
(23:14):
want, they want more thanthey've they've had, and I think
that it's because people arealso and I think this part is
COVID related just coming out ofit.
We realized how kind ofnefarious general business
practices really were with, likeyou know, first of all, just
(23:39):
labeling people essential andnon-essential.
I mean, I get what they'retrying to do with that, but it's
like I'm trying to explain thatlike business is different.
Now, you know, people want,they want their businesses to be
responsible, they want them tobe sensitive to our needs, they
want to be entertained bybusinesses, and now the food is
just the bare minimum.
And now the food.
Yeah, the food is kind of justlike um, I think the food just
(24:03):
got us to like zero.
Now it's not not enough.
And now we are being kind offaced with the extinction of a
lot of heavy hitters because wejust are not.
We kind of put our foot downBecause, again, like it's kind
of comparable like eating outand eating at home and if you
(24:23):
can save tipping somebody goingout, save the gas, because those
prices are out of control too,if we can.
It's almost like taking backcontrol of our dollar, and I
think that is something that wehaven't really seen in the
American financial landscape,because what I mostly kind of
(24:44):
think about when I think aboutjust America and the dollar is
the American dream and keepingup with the Joneses, and I think
they're even eating at homethese days.
So you know, we're going toneed more and for less and it's
got to be good.
We have a saying in Brazil bombonito e barato.
Good, pretty and cheap.
(25:06):
That's what we like, and if wecan't have that, we're going to
keep going, because you know youjust can't beat a home-cooked
meal where we're from.
So maybe the US is comingaround to some of those kind of—
.
Same values, those same values.
Yeah, what do you think Like?
What's—i want to get behindyour eyes with this one.
(25:28):
What is it?
Speaker 1 (25:29):
So I think the first takeaway would be the focus on
businesses trying to getcustomers in the door.
You know, a lot of businessesare partnering with Amazon and
trying to get customers just tocome into their store that foot
traffic.
So either quick check withAmazon lockers and it's like oh
okay, now I'm at quick check,let me get me a soda, let me get
this, you know, while I'm here.
(25:50):
Or the same thing with Kohl'sand Amazon trying to get you
know, those returns, but it'salso on the other side of the
store, so you have to go allthrough Kohl's in order to be
able to do that.
Yeah, I think the second onewould be generally, you know, as
you mentioned, the experience,um, food is just like a thing
(26:10):
that I think as adults, as mepersonally, that you realize how
much you're eating and you'relike three meals a day and then
every day so I think I'm it'sbeing more mindful of when do
you want to eat out, where youwant to eat out, and having
those options and then justbeing like I want to spend my
money a little bit more wazzywhen it comes to my experiences,
(26:33):
and when we're all attacheddigitally through our phones, it
becomes like you need to domore when you're eating out to
disconnect from your phones andhave that interaction where it's
like, oh, this was worth it, Ihad fun.
Connect from your phones andhave that interaction where it's
like, oh, this was worth it, Ihad fun.
So I think those places that Iused to go when I was younger
(26:53):
with my mom, it wasn'tnecessarily like I had to
disconnect in order to engage.
I think people need moreinteraction, more entertainment,
to actually be like present inthose moments.
So I think there becomes achallenge from restaurants to
really find more of whatcustomers are looking for and
entertaining them away in a waythat they want to really
disconnect from their phones andbe more present in that moment,
(27:15):
like Dave and Buster's, youknow, just having like, ok, an
arcade area and then you can eatsomething like that.
That feels like I'm reallygetting more from this than just
basic.
You know greasy food, I guess.
Speaker 2 (27:29):
Because I could do that at home.
If you'd like to watch moreepisodes of the Human Side of
Business and check out all ofour other amazing content,
follow us on all platforms atMontclair underscore, feliciano,
and that's a wrap.
Hey girly, how have you been what's new?
Speaker 2 (00:04):
Don't ask me that till the end of the semester,
please, because I'm not sure youknow.
Speaker 1 (00:09):
Two weeks, yeah, almost there.
Speaker 2 (00:11):
Almost there.
I'm very excited, I think.
I just don't want to check inwith myself until it's over,
because I'm not sure.
Speaker 1 (00:18):
But there's no break, there's no break.
Speaker 2 (00:19):
There's no break.
We're going right into it,right Straight into summer.
Speaker 1 (00:23):
Wow Session.
Speaker 2 (00:24):
I'm more curious about what's going on with you
lately because I know it's day.
What of eating Is day how?
What if?
Speaker 1 (00:34):
there's food at the crib.
There's day, it's day 23.
Okay, of eating at home.
Okay, it's been a struggle.
Okay, trying to save a littledollar, trying to eat healthier.
Speaker 2 (00:48):
What do you miss the most?
Speaker 1 (00:49):
I think, the convenience.
So I have to go to the grocerystore, I have to plan what I'm
going to eat when I wake up late.
I still have to try to packbreakfast lunch snacks, the
dishes, breakfast lunch snacks,the dishes.
So I don't know if it's worthsaving a dollar for me not
having convenience.
Speaker 2 (01:10):
Let's talk about that , though, because I'm still
trying to figure out somethingreal quick.
Maybe you can help me out.
I don't know if they tried tosave a dollar, if they didn't
save enough dollars.
Speaker 1 (01:25):
Have you heard about red lobster lately?
So I did.
Speaker 2 (01:28):
I've never been, never been, whoa but never one
time, not even after the grocerystore, so maybe I have been
indirectly okay I went withoutgoing.
Speaker 1 (01:40):
But yeah, so isn't it about their endless shrimp deal
that is causing them to?
Speaker 2 (01:46):
absolutely go into bankruptcy.
So they actually, um, at aquarterly loss of 11 million,
are now contemplating a chapter11 bankruptcy, and it's kind of
fascinating because it's beingon the other side of that.
We always like we want that tolast just forever.
I mean, you want to gosomewhere, get endless anything
(02:07):
for $20.
Everything is like it costs.
It costs about that to breathethese days.
So I'm like, yeah, let's dothat.
But they did it to a point where, um, their biggest uh
manufacturer, manufacturer,their biggest supplier of
seafood, is now kind ofstrategizing an exit because it
(02:29):
has no longer like a sustainablething.
On top of that, they also havehanded over their leadership to
a CEO that specializes in kindof trying to shift out of that
bankruptcy mode.
So I think it's serious.
It's a serious thing.
You were talking aboutconvenience and you were talking
(02:50):
about saving a dollar.
I think that's really what RedLobster has come to signify like
over their legacy, becausethey've always been like an
affordable option for seafoodand I know that, like seafood
itself tends to have a higherprice point because of, you know
, several different competingfactors and Red Lobster was
(03:13):
always kind of an accessibleoption for blue collar families
and that's being threatenedright now and I'm kind of I'm
not sure how I feel about it,because I think it's I'm not
sure how sustainable that modelis going to be, as we kind of
are in the middle of thisinflation extravaganza right now
(03:34):
.
But I also think that itsignals so much more than that
with the dining industry as awhole.
Speaker 1 (03:45):
Yeah, I think that you know, even a few years ago
people would dine out for theexperience.
You know, I remember my mom andI we would go to Applebee's and
it wasn't necessarily about thequality of food.
It was like my mom and I areout on the town, it's a Friday,
you get the two for 20, you getthe appetizer with two entrees.
It was a great deal.
(04:06):
But then now I think people arequestioning is it worth it?
You know what has changed inthese dining experiences that
it's beyond just the same food.
You know people want more of anexperience and then, if they're
not getting an experience, theywant the convenience they want.
You know Uber Eats or DoorDashto kind of just drop off the
food.
You are at your home and yourown.
You know comfort.
So I think people go out, youknow, to dine in for special
(04:29):
occasions and if it's justsomething that they already know
it's like, why am I going tospend a pretty penny on
something that seems mediocreoverall?
Speaker 2 (04:40):
Well, that's the thing for me now with this whole
thing, because, yeah, it can bethe convenience, the experience
, but the notion of the value ofit is being challenged, I feel
like, not just because they'refacing this bankruptcy, but also
even eating at home is kind ofexpensive these days.
Right, I mean the experience nowis like I don't have to leave
(05:02):
my house and socialize.
Experience now is like I don'thave to leave my house and
socialize um, like if the pricesare kind of comparable, like
you're gonna maybe stay homeover doing the whole thing.
Speaker 1 (05:10):
But then it's also like how good is the endless
shrimp deal when it's on a perperson basis?
It's not per table, true andthen it's only shrimp.
That's not including the sides,that's true.
It's one of those things that Ithink it was a promotion to
really get people in the doorand then from there kind of just
hoping people would spend theirmoney on other things as well.
You know we've talked about thewhole thing with Costco and the
(05:34):
Roast to Street Chicken.
I remember you talking aboutthat.
It's, you know, a loss leaderin that.
You know the company doesn'tmind taking a loss on their
profits of the Roast to StreetChicken, knowing that people are
not going to leave justspending five dollars on that
trip.
Speaker 2 (05:47):
They're going to pick up the size, they're going to
pick up other things becauseit's convenient for them while
they're there and by the way,statistically, according to like
the floor plans of most costcos, you actually have to walk
through about 60 of the store toeven get to the chicken and and
it is kind of like situated bylike sides.
You know things that go goodwith chicken, you know.
(06:09):
But I will say one thing toyour point.
First of all, I love the wholeconcept of this Costco chicken
thing.
It's actually legendary, youknow, for those that are
uninitiated, you know, for 20years Costco's chicken has been
sold for $4.99.
Speaker 1 (06:30):
I love the consistency.
Speaker 2 (06:31):
Well, actually, that's actually what I'm getting
at, because the only time inthose 20 years that they have
raised the price was during the08 financial crisis.
Meanwhile last year 2023, whenRed Lobster started to kind of
realize that they were in bigtrouble in the first quarter.
With that, you know, I think onaverage I may or may not have
(06:51):
mentioned it was on average, 11million dollar loss.
So in the ballpark, you know,somewhere in the 40s, 40 million
dollar loss.
But when they did that, it itwas a $20 deal, right, started
to scramble a little bit, $22.
Then it by, I think.
(07:13):
I think they waited until thethird quarter to raise it to 25.
And then they said, okay, 25.
Speaker 1 (07:18):
For nationally.
Speaker 2 (07:19):
For on a national basis.
So not just that I don't knowif this makes sense, but having
all of that movement, I think,did more damage than good.
I think that at that point inthe game, cause the heat, cause
here's really what it is.
It was two factors, twocontributing factors.
(07:41):
One, once you stick with theprice, just just do that for the
sake of brand integrity, forthe brand image, Because, as Red
Lobster, as a trusted name inseafood purveyance or you know
whatever, and especially becausethey cater to blue-collar
families, just pick a price, youknow, because those few dollars
(08:02):
do affect their particular butI think it's also that they
extended the promotion beyondthe time.
Speaker 1 (08:10):
It was supposed to be a limited promotion, but then
it was like oh no, let's justkeep it, let's just have shrimp
all the time.
Speaker 2 (08:16):
Shrimpapalooza, guys, first of all.
That's like saying let's justhave the holidays all year round
, which I would love, but it'skind of like if every day was a
party.
Like I'm just tired thinkingabout that and I kind of feel
like it's the same thing, notjust for people, because people
can't do endless shrimp all thetime.
I feel like having that kind ofpromotional, that cyclical
(08:41):
approach.
Speaker 1 (08:41):
It would be like a motivation to come in during
that time.
Speaker 2 (08:44):
We know when Lobster Fest is, you know, you know
whatever, and then we go and Ifeel like it's it's giving like
shark week, but like for forever, forever we know when it's
coming, we all get ready for it.
So not just the fluctuation butthe taking away the seasonality
of it.
Speaker 1 (08:59):
It feels like a business that's unsure about
what they're doing and I I thinkthat that makes people nervous,
but I think it was also thecompany already being in turmoil
before this promotion, usingthis promotion as a means to get
some money in.
You know, help profits, butthen, kind of extending it, lost
its value of oh, this is anexciting time.
Let me go in during this andthey didn't I don't think they
(09:22):
actually did the financescorrectly to see oh, is this
actually profitable based off ofhow much shrimp costs and how
much people are generally eatingwhen they're ordering endless
shrimp?
Speaker 2 (09:31):
I mean because if you're going to have it all the
time, I'm going to plan to justgo and eat just shrimp, like I'm
not going to bother with therest of the menu.
But if it's like I'm goingthere because I know no sides,
them cheddar biscuits?
No, because like some peopleyou know that are students, they
might just go.
And here's my little creativetake Get a little cheddar
(09:54):
biscuit, cut it in half, make alittle.
There it is no sides.
So I think it gives people toomuch time to strategize how
they're going to get the mostbang for their buck, because
right now that's what it's aboutthere's too many competing
factors.
First of all, the eating athome, then there's the price of
groceries.
(10:14):
I mean, I don't know when allthings are kind of factored in.
You got to make it almost soundbetter than that.
Speaker 1 (10:23):
And if it was going to be be 25, it should have just
been 25 but I think it's alsolike the indirect competitors of
the role of DoorDash and UberEats is playing into the, I
guess, the eating experience Iknow for me personally, when
it's winter time I'm like I'mhibernating, I'll save my coins
(10:44):
for the summertime and I'll beout and about during that time.
So I'd rather just honestlytake my food to go and I don't
think people see places likeOlive Garden and Red Lobster,
Applebee's and Chili's as aplace like oh, let me order and,
you know, take it to go.
Speaker 2 (10:58):
You know it's one of those things that you're either
eating in or you're not eatingthere at all you know, and not
for nothing, like tippingculture is so out of control, so
I feel like that's anotherbarrier, but it's not just the
cost of the endless shrimp thatyou're paying for.
Speaker 1 (11:12):
It's yeah, you know, if you get anything else than
the tip and then you're like isit really a deal?
Speaker 2 (11:17):
I thought, let's talk a little bit about the shrimp.
So you know, standardizing itnationally.
I think there were someoversights in, like a kind of
the logistical situation becauseobviously if you're in the
Midwest, you're not by any typeof you know, and that's going to
take time, it's going to takepeople to, you know, make that
(11:41):
come together.
And if you're in a state, it'stwo things right, it's like that
part.
And then there's also the factthat if we have a standard rate
for something in a plate, ifpeople are being subjected to
national standard rate in placeswhere, say, minimum wage is not
keeping up with that, now yougot all this shrimp in the
(12:03):
freezer and you got nobody toeat it because really, like
what's going on in today's dayand age, I mean, a dollar is a
dollar, right, we know the valueof it, but more than ever the
difference between 20 and 25dollars, we see now that it's at
the detriment of thisdecades-long legacy and that
goes hand-in-hand with the pricesensitivity that you had
(12:26):
mentioned to me before this thatCostco tried to raise their
prices and they saw a hugedownfall of people getting their
rotisserie chicken because theprice went up.
Speaker 1 (12:37):
So it just shows how certain groups of people that
you're targeting are more pricesensitive to even a dollar fifty
or even fifty cents.
Speaker 2 (12:43):
You know well remember this was during the
financial crisis.
So from both sides, from theconsumer's perspective I don't
even have that dollar maybe butalso from their perspective like
they don't want to take, andit's kind of that they're
actually just a great example ofhow well the brand image was
(13:06):
handled, because they understoodthat that dollar was going to
turn into many more if they didnot honor, um, their customers
kind of willingness to, toparticipate that, you know, was
shown in the short term, though,because I think in the long
term, when people really comparetheir options of fast food or
(13:27):
dining out, they're like, oh,even if the Costco prices for
the rotisserie chicken went up,it's still relatively cheaper
than other things.
Speaker 1 (13:34):
You know, we've seen with the dollar store that has
gone up and it's no longer adollar, but people are still
going to the dollar storebecause, compared to the other
options, it's still cheaper thangoing to Target or Walmart or
other things like that.
So I think in the short term itmay be affected in the sense
that people are like, oh no, I'mnot doing this anymore, but
when you really compare overallprices, it's still going to be
(13:57):
cheaper.
Speaker 2 (13:58):
I mean, I agree.
I also do want to mention, onthe tail end of that, that you
know, I was kind of making thiscomparison as if we're so far
away from that place.
But we kind of are in afinancial crisis, like we're
living in a post pandemic worldwhere just things completely
went out of control.
And I remember even at a pointwhere, like where just things
(14:18):
completely went out of control,and I remember even at a point
where, like before, theinflation train kind of really
got chugging I heard the termlike price gouging going around
a lot because people were tryingto recoup their losses and
things like that and now it'sjust like rampant.
So I feel like people don'tknow where the line is and
people are kind of trying towalk that line between providing
(14:40):
that value and also making surethat they meet their, their,
their fiscal targets.
You know what I mean?
Um, I don't know, for me it'sit's kind of like a romantic
perspective, but I just feellike this is kind of one of
those things that is signalingthe death of the american dream
(15:03):
kind of thing, because I think,um, you know people that are
that have enough money to be outof touch, enough to say things
like we'll just stop eating outand stuff don't understand like
the social implication of thingsand that does affect the
economy on a larger scale, likebut I think it's also pushing
(15:24):
you know, especially restaurantsto challenge what they sell.
Speaker 1 (15:28):
You know you're selling food, but I think people
want more than that.
You know, and it's like whathave you really changed to your
business model and improving itin the last 20 years?
That's a great point.
It's like what have you reallychanged to your business model
and improving it in?
Speaker 2 (15:41):
the last 20 years.
That's a great point.
Speaker 1 (15:42):
It's just all the same.
Speaker 2 (15:44):
That's a great point.
Speaker 1 (15:45):
And I think post-COVID, people are really
questioning how they're spendingtheir dollars.
You know, you can either payfor convenience and Uber Eats
and DoorDash your food, oryou're like, oh you know what,
Let me just eat at home and savefor my experiences of vacations
or things that are going toactually fulfill me a little bit
more than you know some ofthese mediocre restaurants in
general.
Speaker 2 (16:05):
The way that even like McDonald's is priced right
now, I may as well just skip itfour times and then go to.
Speaker 1 (16:11):
Like it's crazy, Like go to some other country go eat
their food, their food, likethat applebee's would be giving
two for 20 and you get basicallythe appetizer and two entrees,
and now 20 that mcdonald'sdoesn't even take you anywhere
and you're not even.
You know being served by awaiter and having that
(16:32):
experience of sitting down andyou know kind of feeling catered
to and then the fact that youknow you were speaking about the
quality.
Speaker 2 (16:40):
I mean, the quality is just not what it was when it
was less, and I feel like peopleare just having a hard time
keeping up with paying more forand it's also interesting
thinking about how a lot ofthese um chains they have their
food in the grocery stores.
Speaker 1 (16:58):
So you know, if you think about it, you could find
tgi friday's wings right in thefreezer aisle.
You can find panera at, youknow, your grocery store.
So it's really like do I needto go to that place to get the
tgi friday's wings?
Speaker 2 (17:13):
yeah, you're right, and that's actually the thing
that red lobster wouldn't beable to sell, because, like just
shrimp, no one's gonna buy justshrimp.
That's Red Lobster at thegrocery store.
You know what I'm saying, likethey're not, look at the
seasonings.
That could be another way tosupplement their.
They did it with the biscuitsyou know, yeah, that's a really
(17:33):
Take no Red Lobster.
This one might save you here,this one might save you the
whole thing.
I think, um, what's interestingabout let's?
I'm gonna just pivot like inthe sense that, okay, costco and
red lobster, cool, but I wantto bring olive garden into this,
which?
basically yeah, first of all.
(17:54):
Uh, I don't think red lobsteris under darden anymore, but it
was.
Um, I forget his name, but Iknow his last name was Darden.
It's under this Darden umbrellaunder which exists Olive Garden
and a couple other partners Idon't want to misspeak started
(18:23):
as a family restaurant, andthese kind of approaches to
value are what kind of gavebirth to these other business
models that are like come eatwhatever you can and get, then
get on out of here.
The only problem is with OliveGarden, the price points are so
much like it's kind of almostthe same price point, but like
the margins are so much widerbecause like I mean it's pasta,
it's kind of almost the sameprice point, but like the
margins are so much widerbecause like I mean it's pasta,
(18:44):
it's pasta.
Yeah, it takes a lot to get meto go out and pay for pasta,
like you know what I mean, butit's like but even they have
like an all you can eat pastabowl, yeah, pasta soup and salad
, but that works for thosemargins.
With seafood it's a littleiffier.
And if you don't figure thatout, going into it while also
subjecting everyone across thecountry to, basically, you
(19:08):
expose yourself for not doingthe math all the way.
And if you couldn't do it, youshould have just kept it what it
was, because it's the money andthe brand image.
The money can't even reallyexist without that thing.
And because Red Lobster hasbeen around for so long, there
are certain expectations.
I think what it's going to taketo save Red Lobster is going to
.
First of all, you're so rightabout the lack of innovation,
(19:31):
but I don't think they've beenchallenged to do that in a long
time.
First of all, there's theappeal of the deal.
Right, there's the appeal ofthe deal right.
There's your target segment,which are blue-collar families.
If you lose that entry point,the people in that I don't want
(19:51):
to say tax bracket, but peoplelike you know in this particular
class.
Speaker 1 (19:56):
If you like.
Raise prices too much, you'relosing your initial target
market?
Speaker 2 (19:59):
You are, but then what does that mean for Red
Lobster, if it doesn't close?
Are you now going to appeal to?
Who are you going to appeal to?
Speaker 1 (20:05):
It's like you can still improve relatively.
Keep your same tax bracket,your same target market.
I guess you know.
But what improvements have youmade with all the profits that
you were making before ifeverything was the same?
You know like.
Speaker 2 (20:29):
End have you made with all the profits that you
were making before, ifeverything was the same?
You know, like endless crablegs were 2099 in 2003.
They didn't learn, so maybe itwas working, but, like you know,
I think it's maybe a lack ofawareness of how things are,
kind of proliferating as theworld becomes ever increasingly
digital.
There's all types of freeeverything on these little apps.
If you download our app, youget a free chicken nugget,
whatever.
I don't know if they can affordthat, being where they are.
I don't know if they cansurvive in this world, like how
(20:51):
it's kind of going now, becauseof all that you have to do even
just to remain relevant.
Speaker 1 (20:57):
I mean it is all and loyalty isn't the same with
these restaurants, and by theway, if the restaurant ain't
instagrammable, yeah they're notgonna experience, they're not,
yeah, like they're not gonna go,because now we have social
capital, it's more than just themoney, um, but they certainly
should have paid more attentionto theirs, so I think this is
why, like this month of me beingmore conscious of what I'm
(21:21):
eating, where I'm eating, howmuch I'm spending on eating out,
I have more of a focus oneating out as a here and there
type of thing, rather than, oh,I'm running late or I didn't
plan ahead of time, just beingmore conscious of what I want to
spend my money on when I dochoose to eat out and, um, yeah,
just, I think, being overallmore mindful of that.
(21:44):
And you know, sometimes it'snice to have one of those like
Chipotle meals and keep it going.
But overall I don't see myselfreally going to dine in places
like Applebee's or you know.
It's just like there's nothingthat I can't get at the grocery
store from the freezer aisle.
That you know would do the samething and cause a third of it.
And if I do go out to eat, Iwant more of an experience of,
oh, there's a nice view orthere's great customer service.
(22:06):
You know there's somethingspecial to that experience
beyond.
Give me a reason to put theoutfit on.
And the quality of food isdefinitely there as well,
absolutely.
Speaker 2 (22:15):
You said here and there.
I wish Red Lobster would havethought about that before making
Endless Shrimp be around.
Speaker 1 (22:25):
Took it away.
Speaker 2 (22:28):
Took that need away because it was always there,
yeah, and now they took it outcompletely.
Now they took it out completely.
So now we back to red lobster.
Come to the front, please.
Speaker 1 (22:36):
I just want to talk to you for a second so, based
off our discussion, what do youthink are the major takeaways
from red?
Lobsterfts are filing forbankruptcy.
Speaker 2 (22:48):
You know, I think this is kind of evidence of a
larger kind of shift where, likeyou said, we're wanting more
from institutions in general,like just the human experience.
I don't know if it's because ofCOVID, I don't know if it's
because it's just so expensiveto live, but people want, they
(23:14):
want, they want more thanthey've they've had, and I think
that it's because people arealso and I think this part is
COVID related just coming out ofit.
We realized how kind ofnefarious general business
practices really were with, likeyou know, first of all, just
(23:39):
labeling people essential andnon-essential.
I mean, I get what they'retrying to do with that, but it's
like I'm trying to explain thatlike business is different.
Now, you know, people want,they want their businesses to be
responsible, they want them tobe sensitive to our needs, they
want to be entertained bybusinesses, and now the food is
just the bare minimum.
And now the food.
Yeah, the food is kind of justlike um, I think the food just
(24:03):
got us to like zero.
Now it's not not enough.
And now we are being kind offaced with the extinction of a
lot of heavy hitters because wejust are not.
We kind of put our foot downBecause, again, like it's kind
of comparable like eating outand eating at home and if you
(24:23):
can save tipping somebody goingout, save the gas, because those
prices are out of control too,if we can.
It's almost like taking backcontrol of our dollar, and I
think that is something that wehaven't really seen in the
American financial landscape,because what I mostly kind of
(24:44):
think about when I think aboutjust America and the dollar is
the American dream and keepingup with the Joneses, and I think
they're even eating at homethese days.
So you know, we're going toneed more and for less and it's
got to be good.
We have a saying in Brazil bombonito e barato.
Good, pretty and cheap.
(25:06):
That's what we like, and if wecan't have that, we're going to
keep going, because you know youjust can't beat a home-cooked
meal where we're from.
So maybe the US is comingaround to some of those kind of—
.
Same values, those same values.
Yeah, what do you think Like?
What's—i want to get behindyour eyes with this one.
(25:28):
What is it?
Speaker 1 (25:29):
So I think the first takeaway would be the focus on
businesses trying to getcustomers in the door.
You know, a lot of businessesare partnering with Amazon and
trying to get customers just tocome into their store that foot
traffic.
So either quick check withAmazon lockers and it's like oh
okay, now I'm at quick check,let me get me a soda, let me get
this, you know, while I'm here.
(25:50):
Or the same thing with Kohl'sand Amazon trying to get you
know, those returns, but it'salso on the other side of the
store, so you have to go allthrough Kohl's in order to be
able to do that.
Yeah, I think the second onewould be generally, you know, as
you mentioned, the experience,um, food is just like a thing
(26:10):
that I think as adults, as mepersonally, that you realize how
much you're eating and you'relike three meals a day and then
every day so I think I'm it'sbeing more mindful of when do
you want to eat out, where youwant to eat out, and having
those options and then justbeing like I want to spend my
money a little bit more wazzywhen it comes to my experiences,
(26:33):
and when we're all attacheddigitally through our phones, it
becomes like you need to domore when you're eating out to
disconnect from your phones andhave that interaction where it's
like, oh, this was worth it, Ihad fun.
Connect from your phones andhave that interaction where it's
like, oh, this was worth it, Ihad fun.
So I think those places that Iused to go when I was younger
(26:53):
with my mom, it wasn'tnecessarily like I had to
disconnect in order to engage.
I think people need moreinteraction, more entertainment,
to actually be like present inthose moments.
So I think there becomes achallenge from restaurants to
really find more of whatcustomers are looking for and
entertaining them away in a waythat they want to really
disconnect from their phones andbe more present in that moment,
(27:15):
like Dave and Buster's, youknow, just having like, ok, an
arcade area and then you can eatsomething like that.
That feels like I'm reallygetting more from this than just
basic.
You know greasy food, I guess.
Speaker 2 (27:29):
Because I could do that at home.
If you'd like to watch moreepisodes of the Human Side of
Business and check out all ofour other amazing content,
follow us on all platforms atMontclair underscore, feliciano,
and that's a wrap.
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