Skip to main content
Part of complete coverage from

It hurts to lose Red Lobster, but money is tight

January 1, 2014 -- Updated 1809 GMT (0209 HKT)
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
September 16, 2014 -- Updated 1305 GMT (2105 HKT)
LZ Granderson says Congress has rebuked the NFL on domestic violence issue, but why not a federal judge?
September 16, 2014 -- Updated 1149 GMT (1949 HKT)
Mel Robbins says the only person you can legally hit in the United States is a child. That's wrong.
September 15, 2014 -- Updated 1723 GMT (0123 HKT)
Eric Liu says seeing many friends fight so hard for same-sex marriage rights made him appreciate marriage.
September 15, 2014 -- Updated 1938 GMT (0338 HKT)
SEATTLE, WA - SEPTEMBER 04: NFL commissioner Roger Goodell walks the sidelines prior to the game between the Seattle Seahawks and the Green Bay Packers at CenturyLink Field on September 4, 2014 in Seattle, Washington. (Photo by Otto Greule Jr/Getty Images)
Martha Pease says the NFL commissioner shouldn't be judge and jury on player wrongdoing.
September 16, 2014 -- Updated 1315 GMT (2115 HKT)
It's time for a much needed public reckoning over U.S. use of torture, argues Donald P. Gregg.
September 16, 2014 -- Updated 1225 GMT (2025 HKT)
Peter Bergen says UK officials know the identity of the man who killed U.S. journalists and a British aid worker.
September 16, 2014 -- Updated 1128 GMT (1928 HKT)
Joe Torre and Esta Soler say much has been achieved since a landmark anti-violence law was passed.
September 12, 2014 -- Updated 2055 GMT (0455 HKT)
David Wheeler wonders: If Scotland votes to secede, can America take its place and rejoin England?
September 16, 2014 -- Updated 1241 GMT (2041 HKT)
Jane Stoever: Society must grapple with a culture in which 1 in 3 teen girls and women suffer partner violence.
September 12, 2014 -- Updated 2036 GMT (0436 HKT)
World-famous physicist Stephen Hawking recently said the world as we know it could be obliterated instantaneously. Meg Urry says fear not.
September 12, 2014 -- Updated 2211 GMT (0611 HKT)
Bill Clinton's speech accepting the Democratic nomination for president in 1992 went through 22 drafts. But he always insisted on including a call to service.
September 12, 2014 -- Updated 2218 GMT (0618 HKT)
Joe Amon asks: What turns a few cases of disease into thousands?
September 11, 2014 -- Updated 1721 GMT (0121 HKT)
Sally Kohn says bombing ISIS will worsen instability in Iraq and strengthen radical ideology in terrorist groups.
September 16, 2014 -- Updated 2231 GMT (0631 HKT)
Analysts weigh in on the president's plans for addressing the threat posed by the Islamic State of Iraq and Syria.
September 11, 2014 -- Updated 1327 GMT (2127 HKT)
Artist Prune Nourry's project reinterprets the terracotta warriors in an exhibition about gender preference in China.
September 10, 2014 -- Updated 1336 GMT (2136 HKT)
The Apple Watch is on its way. Jeff Yang asks: Are we ready to embrace wearables technology at last?
ADVERTISEMENT