Bidenomics: Restaurant Bloodbath Continues as TGI Friday's Joins Applebee's and Red Lobster with Closures
When people can barely afford to eat at home, they can’t exactly go out to dinner. That’s a lesson in Bidenomics that several chains are finding out the hard way.
The latest chain casual restaurant to feel the pinch is TGI Friday’s; according to an article in the U.K.’s Daily Mail on Tuesday, the restaurant announced it had closed one restaurant in New Jersey on Sunday and was planning to close another in Buffalo, New York in June.
That would bring the total for restaurants the family dining chain has closed to 40 this year, including eight in New Jersey and six in New York.
“We’ve identified opportunities to optimize and streamline our operations to ensure we are best positioned to meet — and exceed” a “brand promise” to close “underperforming” restaurants, said Ray Risley, TGI Friday’s U.S. president.
According to the Daily Mail, in addition to the Brick, New Jersey, outlet being immediately closed down, a restaurant on Buffalo’s Main Street, just underneath a Holiday Inn Express, was also scheduled to be closed.
That left the chain with roughly 210 restaurants in the United States, meaning nearly a fifth of its locations had been shuttered in 2024 alone.
Applebee’s, meanwhile, announced earlier in the month that it was going to cut up to 35 locations in 2024 after shuttering 46 in 2023. The chain said it was “an incredibly difficult decision,” and a “last resort,” according to President Tony Moralejo, the Daily Mail noted.
That chain still has more than 1,500 locations.
A bigger Bidenomics mess can be seen in the recent bankruptcy filing by seafood giant Red Lobster.
On Sunday, the chain announced it was filing for Chapter 11 bankruptcy in Florida, saying it needed protection to “drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern.”
The company will likely be sold to its creditors via a deal known in the business as a “stalking horse arrangement,” in which a bankrupt company can choose who or what buys it.
In the filing, the restaurant said that traffic at its restaurants had only “marginally improved” since pandemic-era restrictions began being lifted, despite the fact that — under normal circumstances — the public would be raring at the bit to go out and eat after having to practically sit at home behind two masks and a face-shield for two years in some more stringent jurisdictions.
Yet, the company lost $76 million net in fiscal year 2023. Part of the blame comes from a deal gone wrong to boost traffic: the $20 all-you-can-eat shrimp buffet.
In fact, according to the Daily Mail, Red Lobster majority owner Thai Union lost $11 million in the three months after the promotion began.
To be fair, executives decided, quite stupidly, to keep the deal going for six months despite the red ink.
“We knew the price was cheap, but the idea was to bring more traffic in the restaurants,” said Ludovic Garnier, CFO for Red Lobster.
“So we wanted to boost our traffic, and it didn’t work,” he said.
“For those who have been in the U.S. recently, $20 was very cheap. And the rationale for this promotion was to say we knew the price was cheap, but the idea was to bring more traffic in the restaurants,” Garnier added.
“But something, which was different from our expectation, is the proportion of the people selecting these promotions was much higher compared to expectation.”
Executives probably should have gotten the hint when restaurant guests started going viral with the number of shrimp they could stuff down their gaping maw. One woman reportedly ate 108 shrimp in four hours: “I set a new record at my local Red Lobster, this is my greatest achievement in life,” the woman said in the video.
Yes, congratulations on being the viral metaphor for why a whole restaurant chain went bankrupt. Your parents must be proud.
To be fair, though, the fact that $20 is now so “cheap” it literally drives Red Lobster to bankruptcy — yet was the only way the restaurant seemed to be able to establish foot traffic at its restaurants after COVID-19 restrictions lifted — is arguably the perfect object lesson in how Bidenomics works.
Ideally, as the masks came off and the social distancing eased, people should have been happily returning to the things they were doing beforehand, if not more so. Instead, we’ve seen major drop-offs in key sectors like restaurant traffic and movie-theater box office.
In the latter case, perhaps part of it is that viewers are tired of woke Hollywood and the same old superhero retreads — but a lot of it has to do with the fact America’s taken a hard hit in its wallet over the past few years, especially under an administration that first pretended inflation was transitory, then tried to downplay its effects, then pretended President Joe Biden arrived in office with a 9 percent inflation rate.
Then there are labor costs; that hasn’t gotten any cheaper, particularly in states where the minimum wage is determined by the Democrats. Biden’s answer? “Pay them more,” of course. Yet, as so many waiters and busboys are finding out this year, the real minimum wage is always $0.
This is Bidenomics in action, folks. America can’t afford four more years of it, and TGI Friday’s employees certainly can’t, either.
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