Consumers Conned by Restaurant Rankings: True or False?1
Consumers are increasingly dependent upon second-hand recommendations from total strangers when deciding where to spend our money. Whether we refer to reviews posted online, or studies conducted by people who study market trends, we make purchasing decisions on the basis of testimonials from people we’ve never met.
Culture Cheat Sheet, one of AOL’s leading time stealers, puts together doom and gloom lists of businesses on the verge of extinction. A time stealer is an article that you read because you are too bored not to read it, but will always feel guilty once you’ve read them.
One of their most “popular” cheat sheets is the one that lists restaurants on the verge of extinction. The list keeps changing. I suspect they may have some kind of quid pro quo going on there, but here’s their current list of restaurant chain on the chopping block:
- Sonic (hamburgers)*
- Subway (mystery meats)*
- Noodles and Company (Competes with Pei Wei)
- Qdoba (Mexican)
- Ovation Brands (Hometown Buffet, Old Country Buffet, etc.)*
- Buffalo Wild Wings*
- Ruby Tuesday*
- Papa John’s
- TGI Friday’s*
- Outback Steakhouse*
- Cheesecake Factory*
- Fuddrucker’s (hamburgers)*
- Chili’s (chili)*
- Jack in the Box*
- Starbucks (Seriously???)*
- Shake Shack (more hamburgers)*
We’ve eaten at 15 out of these 18 slop joints, the ones with the asterisks. Notice anything they seem to have in common.
Throw out Starbucks, and you have 17 establishments that serve mostly meat and, if they are failing (and that’s a big if, by the way), they might very well be failing because Americans in general are eating less meat.
In 2017, The New York Times reported that American beef consumption dropped by 19 percent from 2005 to 2014. On the other hand, or maybe we should say on the other hoof, a Fortune Magazine article published in January of 2018 suggests that Americans have started eating more meat because meat is getting cheaper again.
The price of meat took off like a GTO on nitrous beginning in 2004, as widespread droughts adversely affected corn harvests. At the same time, increased demand for corn-based ethanol as a gasoline additive drove up corn costs, increasing the cost of meat production. The droughts peaked in 2007.
During those years, you might have said that eating meat meant eating high off the hog. According to Fortune, the price of beef, pork and chicken didn’t start coming down until 2014, which is when meat consumption began to pick up again.
So, if beef and chicken are getting cheaper, why are restaurants having troubling making ends meet?
The conventional wisdom is that families are eating out less. On the other hand, childless couples are eating out more, for the simple reason that it is quite difficult to shop and cook for two. You almost always end up throwing food out because you made too much of this or that to eat it before it became inedible.
So, yes, you see fewer families dining out in fast food restaurants because they want to eat less meat, or because they are trying to save money to send their kids to college and it seems cheaper to eat at home. Quality conscious consumers may also be avoiding cheap eating establishments because those joints simply aren’t putting enough value on the plate. Cash strapped families can’t afford to frequent establishments with tablecloths and linen napkins.
If more people are staying home, who’s doing all that cooking, with so many families stuck in two-worker households?
Sometimes, of course, they order out, but take out meals aren’t a whole lot cheaper than eating in. Often, all you are saving is the tip.If you use a delivery service, your server’s tip is simply being replaced by your Uber driver’s fee.
What’s cheaper than fast food? Frozen food. Portioned controlled. Impervious to spoilage. That’s why the frozen food aisles in most supermarket chains are getting bigger and bigger. Those frozen food shelves now have names like Chang’s and Fridays mixed in with Stouffer’s and Marie Callender’s. You can even get frozen White Castle cheeseburgers, if you really want them.
But let’s get back to those endangered restaurants. What’s up with that? Are we really going to see the end of the Subway train?
Well, have you seen a Quiznos recently? If you have, take a picture and send it to us, because they’re getting scarcer than the proverbial hen’s teeth. There used to be a half-dozen of them within five miles of our house….but, now, there are only six for the whole state of Florida. (We’re going to Naples next month. There’s one in Fort Meyers. I’m seriously tempted.)
I’m a Ruby Tuesday fan, mostly because they have a decent Memphis style dry rub baby back rib. They used to have half a dozen stores within a 25 mile radius. Now, there’s just one left, and that one’s not looking too healthy.
Let’s take a look at another list. This one comes from Business Insider , which claims to know which restaurant chains are in the top 20 across America. Here’s their list:
- Texas Roadhouse*
- Longhorn Steakhouse*
- Cheddar’s Scratch Kitchen
- Cracker Barrel Old Country Store*
- Seasons 53
- The Capital Grille*
- The Cheesecake Factory*
- Olive Garden*
- Maggiano’s Little Italy*
- Bahama’s Breeze Island Grille
- Carrabba’s Italian Grill*
- Yard House
- Bonefish Grill*
- Red Robin’s Gourmet Burgers & Brews*
- BJ’s Restaurant and Brewhouse
- Buffalo Wild Wings*
- Outback Steakhouse*
- P.F. Chang’s*
- Red Lobster*
We’ve eaten at 13 of these 20 joints. We really like Texas Roadhouse because it attracts a MUCH younger crowd than Longhorn, which seems to appeal mostly to the geriatrics among us. Neither of those places can, however, hold a candle to Seasons 53 or the Capital Grille. Of course, a really good steak at either Seasons 53 or the Capital Grille will run you three times what you would spend at the Roadhouse or Longhorn, but that’s still only half of what you would pay for a SERIOUSLY good steak at Morton’s or Ruth’s Chris, neither of which are on either list.
No one expects to get the same cuisine at Olive Garden that one gets at either Maggiano’s or Carrabba’s, but the odd thing is that the prices aren’t that much different. Nevertheless, no one is ever going convince us that you get a better meal at Olive Garden. (Full disclosure: My cousins own Carmine’s, which is a real New York Italian restaurant, complete with real made guys coming and going, so I know what Sunday Gravy is supposed to taste like.)
Then there’s the Cracker Barrel, at number four, right ABOVE Seasons 53. That’s just surreal. Nor is anyone ever going to convince me that a hamburger from Red Robin (14) could ever be better than a hamburger at Outback (17) because Outback will serve you a rare burger, but Red Robin won’t.
P.F. Chang’s is the only “real” Chinese restaurant chain I can think of, except for Pei Wei, which is owned by the same company. Chang’s is the only place I know of that serves an almost authentic Mongolian Beef. I know whereof I speak. I had friends from Mongolia once. They owned a restaurant in Boston. As a matter of fact, the Mongolian Beef is the only reason to visit Chang’s. The rest of their very small menu is competent but uninspired for someone who used to eat at the House of Chan on 52nd Street and Broadway, or 68 Mott Street in Chinatown. (Don’t bother. Chan’s is long gone, and 68 went vegetarian.)
Three of these restaurants – Outback, Carrabba’s, and Bonefish – are owned by Bloomin’ Brands. According to Cheat Sheet, all three are in trouble…but all three are listed by Business Insider as three of the twenty top restaurant chains in America. There’s something fishy going on here.
The Cheesecake Factory is listed at 13 on Cheat Sheet’s death watch, but it is listed at number seven on Business Insider’s best restaurant article. Chili’s didn’t make BI’s top 20 (would you expect them to?) but Maggiano’s Little Italy is listed at number nine by Business Insider. Brinker International owns both chains, and neither chain is breaking any sales records.
So, five of the 20 restaurants that Business Insider thinks are top guns are also down in the dumps according to Cheat Sheet. It also turns out that BI’s top twenty list was drawn from a list of just 45 candidates, using statistics compiled by Restaurant Business, an industry newsletter. BI looked at three metrics: financial performance, customer satisfaction, and “overall value.” (We have absolutely no idea what overall value means either.)
The number one spot on the BI list went to Texas Roadhouse, which ranked number one in financial performance, six in customer satisfaction and seven in value. Longhorn Steak House, at number two, only ranked at number four for financial performance, earned a three for customer satisfaction but only got an eight for value. Their number three ranking went to Cheddar’s Scratch Kitchen, which ranked ninth in financial performance, eighth in customer satisfaction and number two in terms of overall value.
Question: how does a restaurant chain get ranked number three in overall value after coming in eighth in customer satisfaction?
Here’s a better question: How does Cracker Barrel get rated number one for overall value, but only ranks fourth in Business Insider’s overall rankings. Better yet: how does Cracker Barrel rank number one in any category?e