Skip to main content
Part of complete coverage from

It hurts to lose Red Lobster, but money is tight

updated 1:09 PM EST, Wed January 1, 2014
A storm-damaged Red Lobster sign in Memphis. Forbes reports that the restaurant chain lost 5% in this quarter alone.
A storm-damaged Red Lobster sign in Memphis. Forbes reports that the restaurant chain lost 5% in this quarter alone.
STORY HIGHLIGHTS
  • LZ Granderson grew up poor, and a real treat once or twice a year was to go to Red Lobster
  • The chain is in financial trouble, which LZ says is tied to fewer people going out to eat
  • LZ: Wages are down, and middle-class or working-class families aren't going out for dinner
  • LZ says JC Penney and other stores that cater to middle class are in trouble, too

Editor's note: LZ Granderson writes a weekly column for CNN.com. A senior writer for ESPN and lecturer at Northwestern University, the former Hechinger Institute fellow has had his commentary recognized by the Online News Association, the National Association of Black Journalists and the National Lesbian and Gay Journalists Association. Follow him on Twitter @locs_n_laughs.

(CNN) -- I grew up a poor kid in Detroit.

Government cheese sandwiches, occasional nights without electricity, long-distance telephone calls reserved for emergencies only.

Yet despite our struggles, my family never lost hope that life would get better for us. We never lost faith in the American dream.

LZ Granderson
LZ Granderson

And as trivial as it may seem, a lot of that had to do with Red Lobster.

Now before you dismiss the notion that a chain restaurant could somehow be a beacon of light, you have to understand that in my neighborhood, if your family went to Red Lobster for dinner, that meant you were really doing something. It meant you got dressed up in your church clothes. It meant you would be using a salad fork and maybe even ordering the fancy dish you saw on TV. It meant twice, sometimes three times a year, a poor family like mine could order a steak in a middle-class restaurant and pretend we were rich.

This is why when word recently came out that the chain was in financial trouble, I -- and many people who grew up poor like me -- paused.

"Our industry is in a period of significant change,with relatively low levels of consumer demand in each of the past several years for restaurants generally, and for casual dining in particular," said Clarence Otis, the CEO of Darden, the parent company of Red Lobster, Olive Garden and Longhorn Steakhouse, among others.

The truth is, the working class has been getting pinched for decades.
LZ Granderson

According to Forbes, Darden reported a 37.6% drop in earnings per share in the first quarter of the current fiscal year compared with a year before. Red Lobster was the biggest culprit. The magazine reports that the restaurant's revenue dropped 4.9% during the second quarter. Darden this month announced plans to separate Red Lobster's 705 locations from the rest of its portfolio with the possibility that it could be sold off.

As I've gotten older and a bit more affluent, perhaps even snobbier, I recognize that with the exception of those delicious cheddar biscuits, most of Red Lobster's dishes pretty much taste the same.

But statistics suggest that we haven't been going to restaurants like Red Lobster the way we used to, and it's not because our collective palate has changed.

It's because we can't afford to eat out anymore.

In the four years since the economy began to rebound, the median annual household income fell by 4.4%. But for black households like the one I grew up in, income fell by nearly 11%, more than twice the rate of Latino homes and three times that of whites. Red Lobster remains a favorite spot for black families to dine after church. I imagine it's harder to do with over a 10th of the family's income gone.

But it's a mistake to blame the erosion of buying power and the decline of middle-class touchstones like Red Lobster or JCPenney on just the Great Recession.

"It's a mistake to blame the decline of middle class touchstones like Red Lobster or JCPenney on just the Great Recession."
LZ Granderson

The truth is, the working class has been getting pinched for decades.

From November 2012 to November 2013, weekly earnings rose 1.1% while the consumer price index increased 1.2%, according to the Bureau of Labor Statistics. That small uptick may not seem like much until you factor in three years ago, wages increased 1.8%, and the CPI was up 3.5%. And that may not seem like much until you realize that almost every year since 1983, a series of small ticks like those two examples has been widening the gap between between what we earn and what we can buy.

Consider the poverty threshold.

For a family of four in 1983 it was $10,178. Adjusted for inflation, that should be $23,817.03 today. However, the actual 2013 poverty threshold is $23,492, a difference of $325.03.

When you're living check to check, that's a lot of money.

When you're living check to check with smaller checks to work with, luxuries quickly fall by the wayside. Luxuries like going out to eat, which has slowed considerably since 2010.

Red Lobster is not the only restaurant seeing more empty seats than in years past. It's just the one that happens to have an interesting tie to the poor folks I knew.

The poor folks I know.

As the nation talks about income inequality and the prospects of raising the minimum wage, it's interesting to note that the true buying power of minimum wage peaked in 1968. That also happens to be the same year Red Lobster was founded.

I'm no economist, but I doubt that the struggles of the working class and the struggles of a restaurant that depends on the working class for business are just a coincidence.

Follow us @CNNOpinion on Twitter.

Join us at Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of LZ Granderson.

ADVERTISEMENT
Part of complete coverage on
updated 6:25 PM EDT, Thu July 24, 2014
Pilot Robert Mark says it's been tough for the airline industry after the plane crashes in Ukraine and Taiwan.
updated 11:10 AM EDT, Fri July 25, 2014
Jennifer DeVoe laments efforts to end subsidies that allow working Americans to finally afford health insurance.
updated 8:45 AM EDT, Fri July 25, 2014
John Sutter responds to criticism of his column on the ethics of eating dog.
updated 9:02 AM EDT, Fri July 25, 2014
Frida Ghitis says it's tempting to ignore North Korea's antics as bluster but the cruel regime is dangerous.
updated 2:50 PM EDT, Fri July 25, 2014
To the question "Is Putin evil?" Alexander Motyl says he is evil enough for condemnation by people of good will.
updated 2:03 PM EDT, Thu July 24, 2014
Laurie Garrett: Poor governance, ignorance, hysteria worsen the Ebola epidemic in Sierra Leone, Guinea, Liberia.
updated 9:49 AM EDT, Thu July 24, 2014
Patrick Cronin and Kelley Sayler say the world is seeing nonstate groups such as Ukraine's rebels wielding more power to do harm than ever before
updated 6:05 PM EDT, Wed July 23, 2014
Ukraine ambassador Olexander Motsyk places blame for the MH17 tragedy squarely at the door of Russia
updated 7:42 AM EDT, Thu July 24, 2014
Mark Kramer says Russia and its proxies have a history of shooting down civilian aircraft, often with few repercussions
updated 2:53 PM EDT, Thu July 24, 2014
Les Abend says, with rockets flying over Tel Aviv and missiles shooting down MH17 over Ukraine, a commercial pilot's pre-flight checklist just got much more complicated
updated 9:17 AM EDT, Thu July 24, 2014
Mark Kramer says Russia and its proxies have a history of shooting down civilian aircraft, often with few repercussions
updated 12:37 PM EDT, Thu July 24, 2014
Gerard Jacobs says grieving families and nations need the comfort of traditional rituals to honor the remains of loved ones, particularly in a mass disaster
updated 10:13 AM EDT, Thu July 24, 2014
The idea is difficult to stomach, but John Sutter writes that eating dog is morally equivalent to eating pig, another intelligent animal. If Americans oppose it, they should question their own eating habits as well.
updated 12:30 PM EDT, Wed July 23, 2014
Bill van Esveld says under the laws of war, civilians who do not join in the fight are always to be protected. An International Criminal Court could rule on whether Israeli airstrikes and Hamas rocketing are war crimes.
updated 10:08 AM EDT, Wed July 23, 2014
Gordon Brown says the kidnapped Nigerian girls have been in captivity for 100 days, but the world has not forgotten them.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT