Cheddar bay biscuits and credit unions: A love story we can learn from
Picture this: It’s the 1980s and you are craving seafood. The obvious choice in this decade was Red Lobster. It was the place to celebrate with loved ones, go on a first date, or just enjoy an abundance of seafood. It had come a long way since the first restaurant opened in 1968. After being acquired by General Mills in the 1970s with only five locations, it gained fame and rapidly expanded through the 80s and 90s. Today, the chain is on the verge of bankruptcy and no longer enjoying the success of decades past. So, what happened?
As of April 2024, company officials have deemed Red Lobster a “zombie brand” and within weeks could be filing for bankruptcy. Some experts are blaming the current situation of Red Lobster on its most recent “endless shrimp” promotion in which they saw an $11 million loss in the third quarter of 2023. And in the fourth quarter, things got worse with the restaurant chain seeing $12.5 million in operating losses.
The story goes much deeper than two quarters of losses though. “The Endless Shrimp deals are probably as much a symbol of just either desperation or poor management or both,” Jonathan Maze, editor-in-chief of Restaurant Business Magazine, said. The problems started many years prior to the endless shrimp promotion. This is where credit union leaders should take heed and learn from the mistakes of Red Lobster: Constant leadership changes, private equity meddling in the business, and (hear this) waning customer interest.
TheStreet recently did a study on the decline of some of the most popular restaurants of the 80s and 90s and had this to say: “Eateries and chain restaurants sometimes fail not because they’re not doing a good job or because their food’s not good but because tastes have changed or populations have shifted.” Tastes have changed and populations have shifted, and those restaurants held firm to the way they had always done it. “For example, when Chipotle first became popular, it stole business from casual sit-down restaurants and lower-end fast-food chains. The emergence of the higher-quality, fast-casual concept was bad for chains like Applebee’s and IHOP, which arguably served lower quality food at higher prices.”
So, what does this have to do with credit unions? Everything. Tastes are changing, and the once popular financial cooperatives of the last few decades have two choices: Adapt and remain relevant or lay in a grave next to those tasty cheddar bay biscuits.
The Chipotles of the financial world—SoFi and other fintechs—are on the scene and ready to take our market share—and they’re doing a fine job of it already. We don’t need to emulate SoFi or impersonate fintechs. You (your credit union) need to be your authentic self. Remember what you set out to do (serve a population that wasn’t being served) and find the modern techniques to do it, so you can remain relevant.
How? Think Betty White. She continued to remain a relevant star from her first works in 1939 right up until her death in 2021. Instead of saying things like, “They just don’t make tv shows the way they used to,” she doubled down and adapted to the trends but remained her authentic self while doing so. With 80% of Americans feeling stress daily about basic costs of living, your credit union has a vital role to play. But it has got to be today.
“Adapt or perish, now as ever, is nature’s inexorable imperative.” – H. G. Wells
