If you constantly find yourself craving a vat of snow crab with a side of coconut shrimp
— and permission to wear a bib as a grown adult — you might not be able to get your
fix at your local Joe's Crab Shack much longer.
These are the real reasons Joe's Crab Shack is disappearing across the country.
Trans fats are cheap, easy, and resilient, so they're a no-brainer for restaurants trying
to cut costs or food manufacturers looking to extend shelf life.
They can also be disastrous for your health.
Joe's Crab Shack vowed to stop cooking with trans fats in 2007, but got busted in 2014
for continuing to use them.
Health experts condemned the company.
In the cites, counties, and states that had banned the use of artificial trans fat, Joe's
used real butter.
In other places, it continued to use trans fats despite clearly having a viable alternative.
According to Consumerist, the Center for Science in the Public Interest called out Joe's Crab
Shack in 2014 for using trans fats in the "Joe's Pasta-laya," crab cake dinner and steam
pots.
Michael F. Jacobson, executive director of the center, warned consumers,
"Until the company fixes the problem and switches to a healthier substitute, eat at Joe's at
your own risk—an increased risk of heart disease and premature death."
It's possible these headlines were part of what deterred customers from continuing to
eat at Joe's Crab Shack.
It's never a good sign when your staff is so unhappy, they get the legal system involved.
That's exactly what happened at a Joe's Crab Shack location in San Francisco in 2014, when
nine disgruntled former Joe's Crab Shack workers sued the chain for not following labor laws.
Among employees' claims were accusations that the management refused to grant proper breaks,
manipulated their timesheets to avoid paying overtime, and didn't reimburse them for the
cost of uniforms.
Allegedly, some of the workers were terminated when they tried to voice their concern about
the labor law violations.
This unfortunate PR might not have sat well with folks who were deciding what seafood
chain to choose for a night out, making it another possible factor in Joe's decline.
To boost morale, retain more employees, and increase pay for front-house staff, Joe's
Crab Shack started experimenting with a no-tip policy in the summer of 2015.
The staff's hourly pay went up, and so did the menu prices, with items costing 12 to
15 percent more.
The chain instigated the no-gratuity-necessary test at 18 restaurants.
The plan went over well for a while.
"Officials say tipping is old-fashioned and inspires and sparks an overly competitive
environment among servers."
Then it soured.
In May of 2016, the restaurant announced it would reinstate tipping.
Apparently, the clientele at the no-tip locations spoke with their wallets.
The amount of diners at the no-tipping outposts declined 8 to 10 percent.
A customer survey revealed that 60 percent of Joe's patrons felt like the promise of
a tip was incentive for great service.
Patrons also indicated that they didn't trust the upper level management at Joe's Crab Shack
to fairly compensate servers.
One might argue that the entire experiment left a permanent bad taste in customers' mouths.
For years, one of the hallmarks of casual dining chain restaurants was random, obscure
paraphernalia on the walls.
Now they're making a massive effort to declutter in hopes of competing with the simpler aesthetics
of fast casual chains.
Perhaps the revamps are also necessary because historical prints and knick-knacks on walls
and tables open the potential for something seriously offensive to slip through the cracks.
While dining at a Joe's Crab Shack in Roseville, Minnesota, in March of 2016, two patrons discovered
a photo embedded into the table that depicted a group of people witnessing the lynching
of an African American man.
The title was "Hanging at Groesbeck, Texas, on April 12th, 1895."
A caption at the top read, "All I said was that I didn't like the gumbo."
The customers, an African American couple, were understandably very upset and the Minneapolis
NAACP demanded Joe's corporate office issue an apology.
The customers spoke at a press conference in the restaurant parking lot soon after dining
there.
"When I looked at, it was clear to me that was a lynching."
The restaurant immediately removed the photo and showed remorse, but it's still disturbing
that someone had approved that decor in the first place.
When the story broke, others reported seeing the same photo at other Joe's locations.
In 2013, Joe's Crab Shack's parent company at the time, Ignite Restaurant Group, borrowed
a lot of funds and spent $55 million to acquire Macaroni Grill.
The purchase included over 200 restaurants in the U.S. and overseas.
Just as Ignite bought the chain, the trend toward fast casual dining really started to
take off, and its clientele began to wane.
Ignite Restaurant Group ultimately ended up selling Macaroni Grill two years later for
just $7.3 million, only about 13 percent of what it originally paid for the chain.
In March of 2017, Ignite Restaurant Group was delisted from the Nasdaq Stock Exchange.
In May of that year, Ignite reported quarterly drops in performance at Joe's Crab Shack and
its other major chain, Brick House Tavern, with 14.3 percent and 12.6 percent declines
in same-store sales, respectively.
Ignite Restaurant Group announced it was looking for a buyer and considering bankruptcy protection.
The company's Securities and Exchange Commission filing noted,
"The sales declines are primarily due to decreased guest traffic.
[…] We have deployed many different operational strategies, but so far none have had a meaningful
impact on sales or guest traffic."
In June of 2017, Ignite Restaurant Group filed for bankruptcy, citing debt of $197 million
and assets of only $153 million.
Ignite's revenue had decreased 8.5 percent between 2015 and 2016.
According to Jon Berke, middle markets editor for Debtwire, the purchase of Macaroni Grill
was really the beginning of the end for Ignite and Joe's Crab Shack.
He told the Houston Chronicle,
"Honestly, it seems to me the first sign of real trouble was when Macaroni Grill became
part of the company."
In August of 2017, Joe's Crab Shack's previous owner from 1994 to 2006, Landry's, Inc., put
in the highest bid in bankruptcy court to acquire Ignite Restaurant Group's assets at
$57 million.
Right away, billionaire Landry's CEO and Houston Rockets owner Tilman Fertitta said his company
would likely reduce the number of Joe's Crab Shack locations to just 60.
Fertitta also discussed potentially transforming some of the underperforming Joe's Crab Shacks
into more popular concepts already under the Landry's umbrella.
Some of Landry's most popular establishments include Rainforest Cafe, Bubba Gump Shrimp,
and Morton's Grille.
While Ignite was struggling to dig themselves out of a hole, Landry's thrived despite changes
in American dining trends, with revenue increasing by $100 million from 2015 to 2017.
Armed with the success of a booming business, Fertitta maintained that Landry's could salvage
the Joe's brand.
But so far, that hasn't proven to be the case.
Even before Joe's Crab Shack shifted back to its previous owners, its rep suffered when
locations in New Jersey, Virginia, Nebraska, and New York abruptly ghosted loyal consumers
and employees with sudden closures.
It's possible the closings were a result of landlords ending leases because of the bankruptcy
proceedings.
That would be well out of Joe's hands.
Some say the Monmouth, New Jersey location closed because it couldn't compete with nearby
Red Lobster.
It closed in July 2017 while the others shut down in the first week of August, just before
the final bankruptcy auction.
When the Landry's, Inc. purchase became official, the closing didn't stop.
More than 40 additional restaurants suddenly shut down later in August.
In nearly all of these closures, many employees were left confused and stressed after reporting
to work and finding their restaurants closed.
"I believe that we should have been given notice at least 30 to 45 days if this was
in the works so that we could have had time to get our ducks in a row."
The higher ups didn't warn or notify anyone via email or phone, and apparently there were
even customers who showed up with group reservations.
Joe's obviously could not honor their bookings.
Even as Landry's tried to salvage the brand's name after bankruptcy, it's possible that
disgruntled former employees and customers swore off the chain when this all went down
or even told their social circles.
That easily could have lost Joe's Crab Shack some clout and patrons.
If you do a deep dive into the Joe's Crab Shack website, you won't find much intel on
where its seafood comes from.
A report from PBS News revealed that 90 percent of the seafood Americans eat is from international
sources.
Interestingly enough, according to Brian Marder, owner of Marder Trawling in Cape Cod, Massachusetts,
most of what the fishermen catch in his area is exported to Europe.
It's a safe bet, then, that Joe's isn't getting fresh crab from local fishermen.
In fact, 75 percent of the king crab eaten in the U.S. comes from Russia.
Without any concrete information from the company, it's hard to know where it's coming
from.
"That man ate all our shrimp.
And two plastic lobsters."
As more Americans recognize the importance of sourcing and buying local, it's more likely
they'll opt for seafood restaurants that are transparent about how they source their food.
It helps fishermen who need local markets to improve their bottom lines and maintain
sustainable communities on the coasts.
The lack of transparency around their food and what they use to cook it could have been
a contributor to less enthusiasm for the restaurant and, in turn, its overall decline.
Why eat at Joe's when you can eat at home, with Netflix and a meal kit?
In an effort to save money and eat healthier, folks across the country are opting to cook
at home rather than go out to eat.
According to Bloomberg, the average American dined in restaurants around 216 times in the
year 2000.
By 2017, that number had dropped to 185.
Eating at home is more convenient than ever with pre-chopped veggies and pre-washed lettuce
in the produce section, or meal kit services that deliver the exact amount of ingredients
families need directly to their doors.
Meal kits generated $5 billion in revenue across the globe in 2015.
To try to counteract the less-eating-out trend, some restaurants are experimenting with their
own meal kits.
Several Chick-fil-A restaurants in Atlanta are offering meal kits that people can pick
up, then take home to prepare.
But a big part of the allure of Joe's Crab Shack is the ability to messily crack and
eat crab at the table, so it seems implausible that this would ever be an option for them.
The popularity of meal kits and efforts to save money by eating at home have no doubt
caused Joe's Crab Shack traffic to suffer.
While casual dining joints like Joe's Crab Shack struggle to keep customers coming, fast
food chains continue to perform well.
Between 2013 and 2016, around 37 percent of adults ate fast food on a given day, according
to the Centers for Disease Control and Prevention.
Why would the average American diner opt for White Castle over Joe's Crab Shack?
Fast food is cheap and filling.
It offers plenty of calories to keep someone full without putting a huge hole in their
wallet.
It's also quicker.
Often, hungry people would rather zip through a drive-thru and eat in their car as soon
as that sack of food is in their hands, than settle into a booth to order from a menu.
It's also possible that people often choose where to eat based on convenience, not cravings.
It's hard to foresee a world where anyone would want crab served out of a drive-thru
window, even if it was available.
Joe's Crab Shack isn't just a quick meal.
It's an experience, perhaps one that Americans have become less and less interested in having
since its heyday at the turn of the century.
"We've got crab legs.”
“Crab legs?
Ahhhhh!"
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