The future of dining

This episode explores how changing consumer habits, economic factors, and technological advancements are reshaping the dining industry in the United States.

1. Traditional casual dining chains are facing significant challenges due to generational shifts in preferences and economic pressures.
2. The reservation scalping market is transforming access to popular dining venues, creating a secondary market where reservations are bought and sold at premium prices.
3. Economic and logistical challenges continue to impact local businesses, as seen in the Port of Baltimore's recovery efforts.
4. The Texas power grid issues underscore the broader economic impacts of energy costs on residents and businesses.
5. The dining industry's future is being shaped by a complex interplay of consumer behavior, economic factors, and technological changes.

1. Economic Update: Port of Baltimore

The episode opens with a focus on the economic recovery of the Port of Baltimore, emphasizing the logistical and business challenges following a major accident. Key updates are provided on the reopening of the port and its implications for local businesses. Kristin Schwab: "Today workers finally moved the dolly out of the waterway, a key step towards fully reopening the Port of Baltimore."

2. The Decline of Casual Dining

This chapter discusses the decline of traditional casual dining chains like Red Lobster, linking the trend to inflation and changing consumer tastes. Daniel Ackerman: "Red Lobster says it plans to keep most locations open, but it has an uphill battle."

3. Texas Power Grid and Utility Costs

The narrative shifts to Texas, where high temperatures and an unreliable power grid highlight the challenges of energy costs. Elizabeth Troval: "Texans paid twice as much for electricity compared to pre-pandemic prices."

4. Reservation Scalping in Dining

A deep dive into the emerging market of reservation scalping, where high demand for popular spots has led to a lucrative resale market. Adam Isco: "Last year, Appointment Trader sold almost $6 million in restaurant reservations."

1. Explore alternative dining options to avoid high reservation costs.
2. Consider energy efficiency improvements at home and in businesses to mitigate utility costs.
3. Support local businesses recovering from economic disruptions.
4. Stay informed about changes in consumer behavior to better adapt to market demands.
5. Be proactive in managing reservations and dining plans to avoid overpaying in secondary markets.

Fast-casual sit-down restaurant chains have a lot on their plates right now. They’re unpopular with Gen Z customers, struggling to maintain reasonable prices and can’t compete with made-to-DoorDash options like Chipotle. Meanwhile, at the other end of the restaurant spectrum, reservations at trendy spots are hot tickets in resale markets. Also in this episode: The Port of Baltimore hopes for a return to normalcy, Texans gear up for a sweltering summer and homeowners in extreme weather-prone areas turn to state governments for insurance.

People

Kristin Schwab, Daniel Ackerman, Elizabeth Troval, Adam Isco

Companies

Red Lobster, Carnival, OpenTable, Resy

Books

None

Guest Name(s):

Adam Isco

Content Warnings:

None

Kristin Schwab
Listen up, people. We've got one last chance to double your impact when you donate during this May fundraiser. It's match Monday, and the investors Challenge Fund is matching donations today only up to $25,000. We need to put every single dollar of these funds to use for our newsroom in the months ahead so we can keep you and people across this country informed. Please give right now and generously@marketplace.org.

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We're taking a road trip around the US economy today, north, south, east and west. From american public Media, this is Marketplace in New York. I'm Kristin Schwab, in for Kairisdahl. It's Monday, May 20. Good to have you with us.

Let's start our journey today in Baltimore, where it's been nearly two months since the container ship the dolly struck the Francis Scott key bridge, ending the lives of six construction workers and upending the lives of many business owners. Well, today workers finally moved the dolly out of the waterway, a key step towards fully reopening the port of Baltimore. So does this mean business there will eventually go back to normal marketplaces? Stephanie Hughes takes it from here. Sugar cars, tractors and containers full of other goods are big items for Baltimore's port.

And Scott Cowan, president of the Baltimore chapter of the longshoremen's union, expects that cargo to start rolling back in. Longshoremen move cargo on and off ships, and about 1800 of them have been out of work for the last eight weeks. But Cowan says, now we got a good looking ship. Schedules for the next month or two. Parts of the port still feel empty, including the trans american warehouse owner Craig McGraw says many of his clients decided to ship to other ports like Norfolk and Savannah, while Baltimore was inaccessible, and he worries that business won't return.

If everything's going well at the new port, are they going to turn around and come back to Baltimore? You have to go through that whole process again. But Baltimore has some advantages. It's farther inland than any other port on the east coast, which means if cargo arrives here, it doesn't have to travel as far in land to get where it's going. University of Maryland supply chain management professor Phil Evers says he thinks that'll bring a lot of shipments back simply because it's typically a lot cheaper to move a container by water than it is by either truck or rail.

It's not just containers that are coming back, but passengers, too. Cruise ships are returning. Carnival announced it has a ship coming into the port. Within the next week, it had also moved its Baltimore operations to Norfolk. Ever says.

There are some positive things that could come out of the disaster, he says. As they steady rebuilding the bridge, they could look into creating one that allows for a wider shipping channel so you could have more traffic coming in and out. Evers also says any new bridge would likely be state of the art in both design and construction. That means engineers could think about how it might withstand impacts in the future. In Baltimore, Im Stephanie Hughes for Marketplace.

Red Lobster used to advertise that it was where America goes for seafood, but apparently a lot of Americans are going somewhere else. The chain has filed for bankruptcy, saying its customer count has dropped 30% since 2019. Red Lobster says it plans to keep most locations open, but it has an uphill battle because as marketplaces Daniel Ackerman reports, inflation and changing consumer tastes are making business difficult for casual dining restaurants. Kids these days, says Cornell University's Alex Suskind. They're part of casual dining's problem.

Most young folks like, you know, I have some Gen Z children, and they would be like, oh yeah, that's where grandma goes to eat. Red lobster chilies. Outback Steakhouse and other casual sit down chains have been around for decades. Some diners, young and old, have come to see them as wallpaper restaurants, says Steven Zagor at Columbia University. You're not a trend maker.

You just sit there and people recognize you as being a good old friend without an awful lot of excitement. Flashy promos can get customers through the door, like Olive Gardens never ending pasta bowl or Applebee's $1 margaritas. But Zegor says they can backfire, too, as in the case of Red Lobster's money losing all you can eat shrimp deal. People are putting literally shrimp in their pockets, and I have seen that. Speaking of takeout, casual chains had trouble pivoting there when the pandemic shutdowns hit.

When they lost their dining rooms, they lost their or business model. Sam Okus is editor in chief of nations restaurant News. He says even though some diners have returned to restaurants, more and more consumers would rather press a button on their phone, have it sent to their doorstep. And that market is already crowded with cheaper order at the counter. Spots like Chipotle and sweetgreen burritos and salads just travel better than shrimp in a pocket.

Im Daniel Ackerman for Marketplace Wall street today. A little meh on this Monday. We'll have the details when we do the numbers.

It's only May, and Texas is already under a heat advisory. Temperatures in parts of the states may get as high as 115 degrees this week by now, residents have learned to keep an eye on the reliability of the state's electricity grid. They'll also, of course, keep an eye on their electricity bills, because even though they live in the country's energy capital, it doesn't mean low energy prices. Marketplaces Elizabeth Troval at Cracker barrel, southeast of Houston. I catch up with Robin Wright.

Yes, like the actress, except she has way more money. Wright works here and another restaurant six days a week to support her and her twelve year old granddaughter. She makes her money stretch, and that means this summer, being careful not to crank up the ac. I haven't turned my electricity below 74 degrees in years because I can't afford to pay the bill. I just take all the covers off.

Then. I really would rather it be really cold and snuggle under the covers. Wright knows how to adapt to extreme weather. She lost power for a week during the 2021 Texas freeze and evacuated her home for nearly a month after Harvey. So we adapt by wearing almost nothing inside the house, and that's all we can do.

In 2022, Texans paid twice as much for electricity compared to pre pandemic prices, according to the Dallas Fed. And prices have stayed volatile. Ed Herz, who teaches energy economics at the University of Houston, says that volatility has to do with how power plants in Texas get paid. Only when those power plants are putting electricity into the grid is the only time they make money. And he says plants actually make more money when electricity is tight.

Other grids are more cautious. They pay for capacity, meaning how much energy they might possibly use. There's more of a cushion if there's a cold snap or heat wave. Hers compares it to paying for the fire department. Nobody likes paying for extra capacity, but think about it.

We don't use fire departments all day long, and we pay to keep them around. But Texas takes a deregulated approach. That means when there's sudden demand for extra electricity, prices go up 10, 20, 60 fold. That's bad for consumers during extreme weather. But in the past, this leaner approach has meant cheaper bills.

Energy consultant Doug Lewin Texas did experience very low prices for for quite a while. But when the catastrophic freeze of 2021 knocked out electricity across the state, it was a wake up call. Now more money is being spent on capacity to give more of an energy cushion, but it's ad hoc. The deregulated structure of the Texas energy market is the same. That sort of leads to the worst of both worlds.

Frankly, Lewin isn't convinced. The grid is actually more reliable, and which you definitely end up with is higher prices. So what is Texas to do when the weather is getting hotter and more people are moving in? Some people say the state needs to build more natural gas power plants to come online when demand spikes. Lewin says Texas needs to address energy demand, like improving energy efficiency.

That needs to be brought into the market, both for reliability, because high demand is one of the biggest risk factors, and whether or not we're going to have blackouts, and to help lower bills, bills that will continue to weigh on low income Texans this summer. There are programs that can help. One is run by the nonprofit Baker Ripley in Houston. Desiree Davis runs the utility assistance program. The need for the program, the assistance far outweighs the amount of funds that we have.

Some requests for aid come after power has already been shut off. Last summer, Baker Ripley helped 34 households get their lights back on. In hot summer months. Davis says electric bills can increase 25% to 50% can be especially tough for those on a fixed income. When I was a customer service representative was a senior that I still work with to this day, that she literally was considering taking her own life because she was struggling to pay her energy bill.

She says many have to choose between keeping the power on or paying for their meds or food. In Houston, I'm Elizabeth Troval for Marketplace.

Daniel Ackerman was telling us earlier about how some restaurant chains aren't doing so hot. Well, on the opposite side of the coin are restaurants so popular that a whole reservation resale market has popped up to capitalize on eager diners. Just like ticket scalpers are driving up the price of concerts, restaurant scalpers are demanding hundreds of dollars to simply get a seat at many popular eateries in big cities. Adam Isco wrote about these third party sellers for the New Yorker. He joins me now.

Adam. Kristen, thanks so much for having me. It's great to be on the show. I feel like this is totally anecdotal, but I feel like it's harder to get a reservation these days, whether it's a fine dining restaurant or a buzzy burger joint. What's changed about the way we actually get a table?

Well, I mean, I think reservations have always been sort of tricky in New York and in other places. They've always sort of held a cultural currency. It was very hard to get a reservation at the four Seasons in the sixties or le Cirque in the eighties, or per se in the two thousands. But I think today, as you point out, things are pretty crazy. They're very different.

And a big part of that I think is that there's an entire secondary market to buy and sell reservations online. Yeah. So say I want to make a reservation at a buzzy place that's been booked for weeks. What are those new ways? What are my options?

So what we see when we log into opentable or to Resi, when we're trying to get that hard to grab reservation is not really a reflection of reality. These sort of buzzy, trendy restaurants in New York or LA or wherever we are, are only listing a fraction of their tables online. And this is not entirely new. Right. Restaurants have held back tables for celebrities and for vip's and for big wine spenders and for friends with a manager.

You know, you name it forever. But the tables that we do see, we're likely to only see them for a few minutes. And after a few minutes, a bot or a table scalper, they grab the reservation and then they sell it back to the highest bidder online. Who are these scalpers? Are they refreshing, you know, the reservation page like the rest of us?

Yeah. I mean, they call themselves mercenaries, they call themselves hustlers on a website called appointmenttrader.com dot. So you have an Ivy League college sophomore using a bot to make a reservation. And you also have industry insiders, hotel concierges, bartenders, maitre D's, line cooks, in some cases risking their jobs to sell reservations. One of the more interesting stories that I heard was about these college kids from affluent families who are borrowing their parents's Amex Black cards, telephoning the Amex Centurion concierge, having them book a hard to get table, and then reselling that reservation online.

Oh, wow. So people are going to really extreme lengths to make reservations, but then to sell them online, I guess that means things are pretty profitable. How profitable is this market? You know, last year, appointment trader sold almost $6 million in restaurant reservations. But the sort of, the hustlers, the mercenaries, the table scalpers, they're making a lot of money, too.

I talked to one student at Brown University who, who said he's making between $70,000 and $80,000 a year selling reservations. Right now. If you were to log on to get a 05:00 two top at Fort Charles prime rib in the West Village in New York, the going price is $410. And that's before you even sit down for that $130 dry aged, bone in Ribeye steak. Yeah.

Well, a lot of the restaurants you talk about are sort of elite, trendy, higher priced restaurants. But are restaurateurs worried that this reservation resale business might trickle down into more average or casual dining. Yeah, I mean, you know, I think one really important caveat to all of this is that it all really depends on where you want to eat. There are perfectly good tables at perfectly good restaurants all over town where it's not all that hard to get a reservation. I mean, I think there's an astounding amount of eateries in New York, something like 25,000 restaurants.

What we're talking about here are the really hard to get into buzzy spots that are coveted by a certain group of folks that really want to go out to eat for a special occasion or a date night or whatever it is. I think it just remains to be seen whether or not this will trickle down into those other 10,000 restaurants. We'll just have to see. There's an element of data sharing here between these apps, and some reservations can actually track, say, how much you spend on wine. How are restaurants?

And these companies are collecting data. Thinking about that, high end restaurants have always taken notes on their guests, whether they're writing in your profile that you're an HSM, a heavyset man, or a WW, a wine whale, if you spent big on wine. But now, as you mentioned, these digital reservation platforms are helping restaurateurs keep track of much more about us as diners. How often we visit, how big our tabs are. Do we just sort of sit there at a nice table with a single cup of soup between the two of us?

So I do think that we have a new model emerging, just like other aspects of our economy with restaurant reservations. Adam Isco wrote about reservation scalpers and brokers for the New Yorker. Adam, thanks for chatting. Thanks for having me. Appreciate it.

Coming up, we will always give you a Christmas bonus in some way. A promise is a promise, no matter how early it's made. But first, let's do the numbers. The Dow Jones industrial average fell 196 points to finish at 39,806. The Nasdaq climbed 108 points, seven tenths percent, to close at 16,794.

And the S and P 500 ticked up four points, just under one 10th percent to end at 53.08. We heard from Stephanie Hughes about business at the port of Baltimore. Let's check in on some boat and shipping related stocks. Carnival Cruise Lines, which operates 27 cruise ships around the world, swelled seven and three tenths percent. Shipping company Matson, based in Honolulu, Hawaii, lost nine tenths percent, $35.5 million.

That's the final price paid for Andy Warhol's artwork. Flowers at a Christie's auction last week. Another florally themed piece of art, Georgia O'Keeffe's red Poppy, went for $16.5 million at the same auction. Bondsfeld the yield on the ten year tea note rose to 4.44%. You're listening to Marketplace.

Listen up, people. We've got one last chance to double your impact when you donate during this May fundraiser. It's match Monday, and the investors Challenge Fund is matching donations today. Today only up to $25,000. We need to put every single dollar of these funds to use for our newsroom in the months ahead so we can keep you and people across this country informed.

Please give right now and generously@marketplace.org. Donate and thanks.

My name is Lee Hawkins. I've been a journalist for over 25 years. On my new podcast, what happened in Alabama? I get answers to some of the hardest questions about how things came to be for many black Americans and the truth that must come before any reconciliation can happen. I investigate my family history, my upbringing in Minnesota, and my father's painful nightmares about growing up in Alabama.

What happened in Alabama is a new series, confronting the cycles of trauma for myself, my family and for many black Americans. Listen now.

This is Marketplace. I'm Kristin Schwab. Wildfire season is just around the corner in the western part of the United States, and each year it gets harder for homeowners to buy insurance as more insurers limit their coverage in disaster prone areas. Dozens of states have safety net plans to fill the gaps. California's is called the fair plan.

It's supposed to be the home insurance of last resort, but now it's the only option for a growing number of residents. Scott Rod from KPBs in San Diego has more. Paul Felber is showing me around his two acre property in east San Diego county. It's lush and green after this year's winter rainstorms. So I'll just come down in here and I'll take out the stuff that I don't want so that I can weed whack all around it without taking this out, and I'll just leave it there.

The 72 year old retiree doesn't just maintain his yard, he's trying to transform it. What I really wanted to focus on was trying to restore as much as possible a native plant community on this property. There's a certain Zen ritual to it all. Yank out the non native mustard and star thistle plants, nurture the budding penstemons and California lilacs. Come next year, hell, do it all over again.

And Felber says thats not the only challenge with his property. I live in a high fire risk. In fact, I live in extreme high fire risk area. Felber has cut back much of the flammable vegetation bordering his home and spent more than 60,000 to harden it against wildfire. But home insurance companies weren't impressed.

In the last five years, the Felbers were dropped by two different companies. Nobody else was available to insure our property. So I ended up on the California fair plan. That's the plan for properties that otherwise can't get insurance. I'm paying about $5,500.

That's way more than the $1,500 yearly premium he paid several years ago. It's an increasingly familiar story in places threatened by climate fueled disasters. Safety net insurance plans in Florida and North Carolina have ballooned in recent years due to hurricane risks. In California, where wildfires are getting more extreme, the number of fair plan policies has tripled since 2018 to more than 375,000. It's been a tremendous increase in a very short period of time.

Victoria Roach is president of the fair plan. She testified this spring before a committee in the state assembly. There's not a lot of options out there for people. And so instead, the fair plan is quickly moving to be the first resort for a lot of people. The fair plan is a state mandated insurance pool run by insurance providers that do business in California.

But it's costly for homeowners and doesn't provide comprehensive coverage. So the idea has always been to move people back into the traditional insurance market as quickly as possible. Still, these days, many homeowners find themselves stuck on the safety net plan for years. The growing fair plan is really what keeps me up at night. Ricardo Lara is California's insurance commissioner.

It puts the highest risk properties into one pool. That means a bad wildfire season could destroy many homes on the fair plan, triggering an avalanche of costly payouts, and that could drain the plan's financial reserves. Lara says this scenario would further destabilize the state's insurance market. Getting people off the fair plan and back into a competitive market is one of my top goals. Lada has proposed a plan that would require insurance companies to write more policies in fire prone areas.

Though theres a trade off, the state would make it easier for those companies to raise rates. Lara believes the reforms will bring more competition and predictability to Californias shaky insurance market. But Felber, the retiree outside of San Diego, says hell believe the change when he sees it. It leaves me hanging out in the wind, while from my perspective, corporate America and government try to come to some agreement, which usually, in my experience, takes a long time while he waits, Felber's yard will keep him plenty busy. After all, the invasive cat's ear plants this year have been especially stubborn.

In San Diego, I'm Scott Rod for marketplace.

We've been taking the economic temperature across the country today, starting in Maryland, then moving to Texas, also California. We'll head now to North Dakota to check in with one of our retail regulars, Ashley Morkan. She owns unglued gift shop in Fargo, North Dakota. The retail side of our unglued life has been great, actually, and it's honestly been unexpected, because last year in 2023, we moved into a new marketplace and we really didn't know what we were doing and if it was going to work out. But this last year and this year to date have been like blowing out of the water how it was when we were downtown, actually.

So when we moved our shop into in 2023 to this new marketplace, our sales just increased with us moving there. And so that's really allowed us to increase some of the wages that our crew has. And as we add on more positions, like we can start them at a larger base pay. It was just this past month we gave everyone, basically it was like a, it would be an 8% raise. And then at the end of the year, too, we expect to be able to do more of like a bonus because I kind of live in the Christmas vacation world of national Lampoon, where I'm like, we will always give you a Christmas bonus in some way on the retail side at least.

So summer events definitely drive up our revenue as well. They are a ton of work. So I'm definitely learning to appreciate the labor costs of putting on literally any event. And so we're kind of tracking that a little bit more closely, too, because with events still have this, like, huge spike of cash flow, but with our type of event that's all very craft and supply heavy and instructor heavy, that goes down pretty quick. And so we do have a lot of cash flow, but it doesn't necessarily stay with us.

So we're trying to be more smart about it and evaluate it better to make sure that we're actually charging appropriately for events.

For the longest time, I was not paying myself very much at all, and I used to be a nurse, and I'm finally getting closer to my nursing wage that I had twelve years ago before I started on glued. And that has really, for us, has allowed us to pay off more personal debt that we racked up when our shop failed super hard in Sioux Falls. And so we are finally focused on that first. But I can't live without traveling. And so it's also allowing for us to do even small trips and probably a bigger one this fall.

I think this fall will be the time that we actually do it to kind of celebrate.

That's Ashley Morgan in Fargo, North Dakota. Remember, we can't do this series without you. Tell us about your economy@marketplace.org. Myeconomy this final note on the way out today. It's another sign that consumers are near their inflation breaking point.

Saw this in Reuters. Target says it's cutting prices on thousands of basics, things like milk and diapers as shoppers pull back on spending. And it's not the only name trying to lure people in with deals. The same Reuters story says McDonald's is considering launching a five dollar meal deal. The burger chain first started selling its dollar menu right around the early two thousands recession.

Our daily production team includes Andy Corbin, Elise Hasan, Maria Hollenhorst, Sarah Leeson, Sean McHenry and Sofia Terenzio. I'm Kristin Schwab. We'll see you tomorrow.

This is APM. Hey, everyone, it's Reema Grace, host of this is uncomfortable. If you're looking for some good recommendations on books to read, well, you should join. This is uncomfortable's summer book club. Every other week in our newsletter, we'll share a new book that'll make you rethink your relationship to money, class and work, while also featuring an interview with the author or an expert on the topic.

Plus, when you join, you'll be entered in a giveaway where you could win some this is uncomfortable merchandise. Be sure to check it out. Sign up today@marketplace.org. Bookclub.