The Minneapolis/St. Paul Business Journal reports the Buffets Holdings Inc., parent company of Old Country Buffet, has filed for Chapter 11 bankruptcy protection.
Buffets has 626 restaurants in 39 states, including buffet-style restaurants under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain names, and Tahoe Joe's Famous Steakhouse steak-buffet restaurants.
No more evidence is needed to point out the flawed business model in today's obese society than Old Country Buffet, where unlimited poor-nutritional food is served.
In this blog I have been telling the restaurant industry to change its ways for almost two years now. Americans don't want cheap unlimited unhealthy food from their restaurants. And now they are voting with their wallets.
The company blames the recession, and higher food prices. I blame the wrong sized portions for the wrong price.
In fact, wouldn't logic dictate that during a recession more people would go to a buffet if it was the RightSize at the RightPrice. But as Yogi Berra might say, people are flocking to stay away from these restaurants.
This year the first of the Baby Boomers are receiving their Social Security checks. And traditionally senior citizens are patrons of these buffet-style restaurants. (At Old Country Buffet anyone over 60 gets a discount.)
But what the executives (from a hedge fund) forgot, that this is the first obese generation...that wants to change their evil ways.
As with all recessions, the poor business models will be tested and discarded in this capitalism yard sale. Unlimited poor food is an idea stuck in the 1950s, and will not resonant in the new millennium.
Paul Olson, research director at Restaurant Finance Monitor, a Minneapolis-based trade publication, said analysts are bracing for bad news next month when restaurant companies begin reporting 2007 results.
"Everyone is bracing for some pretty ugly misses. They think the fourth quarter was going to be pretty bad," he said.