Transcription
Golden Corral is the number one all you can eat buffet chain in the United States with an estimated $1.6 billion in sales each year. An impressive number, especially when you consider that just about every other major buffet chain in the country has effectively failed, or at the very least, they have been severely diminished from where they once were. Previous videos on this channel include the decline of CeCe, Sweet Tomatoes, Ponderosa, Old Country Buffet, and Sizzler. All of which have filed for bankruptcy at least once and have mostly disappeared.
Meanwhile, Golden Corral has been much more resilient. They have survived multiple changes in the market, consumer preferences, negative media attention, a pandemic, and so much more. And after all of it, they are arguably doing better today than ever before. So, in this video, I want to explore how Golden Corral has been such a standout success over the years by highlighting some of the more drastic rises and falls throughout its history.
Starting off with the initial rise, not as a buffet, but as a budget steakhouse, if you can believe that. See, back in the 1970s and the 1980s, there was a trend in the industry where all these restaurants open that specialized in selling lower grade steaks for only a few dollars. It was appealing to many customers because it allowed them to take their family out for an affordable steak dinner, which in the past would have been a much more classy and expensive experience. These budget steakhouses typically had a southwestern theme with the biggest chain being Ponderosa.
Well, in the early 1970s, James Maynard and William Carl were trying to break into the restaurant industry by opening one of these steakhouses in North Carolina. They started out by applying to Ponderosa along with some of the other similar chains to open their own franchise. But after being rejected by all of them due to lack of experience, they were able to raise enough money to start their own original concept. At first, it was called Golden Steer, but after issues registering the name, they quickly changed it to Golden Corral. They stood out from the others by offering fresher and slightly higher quality food. Unlike Ponderosa, their steaks were USDA choice beef, never frozen, and cut at the restaurants along with their fries. Obviously, that led to comparatively higher costs, leading to losses at two of their first three locations. But as they continued to open more restaurants, they focused on smaller locations in smaller towns that were mostly overlooked by the competing steakhouses. So, the higher sales combined with economies of scale helped them become profitable. Within about a decade, they had opened around 200 locations when they almost doubled in size by acquiring a competing company in Kansas called Sirloin Stockade.
But by the end of the 1980s, most of these budget steakhouses were struggling. I recommend watching my video about Ponderosa if you want to hear a little bit more about the reasons behind it. But going back to my list, Golden Corral's first fall, I would say it was mostly due to Americans eating less red meat. At the time, many people were abandoning it in favor of other meats that they felt were healthier, like chicken or fish. I'm sure I do not have to explain how that would be bad news for a steakhouse like Golden Corral that generated most of their sales from red meat. In short, there were more steakhouses than ever before competing for fewer customers. A common response to this for many of the chains, including Golden Corral at first, was to add a salad bar, providing an attractive alternative for many of their customers. However, the drawbacks to this plan included the fact that it was considered more of a side offering. While their core business was still centered around a declining food, but also consider the fact that these smaller buildings and lower population communities were not built to accommodate a salad bar. It took up too much room and eliminated up to 30 seats from their dining area.
Here is where I really have to respect them because instead of clinging on to a dying concept, they invested a lot of money and took some big risks to essentially transform the entire business. And that is going to lead me into the next rise of Golden Corral, which of course would be the buffet. Seriously, they adapted a new strategy that in a lot of ways was the exact opposite as before. Instead of focusing on mostly ignored small towns, they started opening restaurants in much larger, more competitive markets. And most of those new locations were at least twice the size of the previous ones. Not only to accommodate more customers, but to make room for their all you can eat buffet that consisted of more than 150 items, including their brass bell bakery that made fresh rolls every 15 minutes. There have been changes over the years since, but basically it became much more like the Golden Corral that you recognize today.
They also started franchising in a big way, and as far as I could tell, it was a stable program. At first, it was only open to the company's existing general managers, but when they expanded it, they still required previous restaurant experience and forced them to attend a 12-week training program. By the early 1990s, sales were rising again to new highs each year, and they continued that momentum well into the 2000s.
Now, I do not want to make it seem like it has been a flawless journey from that point because they have experienced some potentially major setbacks. Some of these include a Salmonella outbreak in 2003, a norovirus outbreak in 2012. That was followed by a viral video the next year where an employee at a Golden Corral in Florida filmed a lot of gross food sitting next to dumpsters. You might remember that one. It was pretty big. The company quickly fired the manager of that location and assured the public that the food was never going to be served to customers. Though, you might want to look a little further into it before you finalize your opinions about it.
My point here is that despite some potentially major setbacks, Golden Corral has risen above every other major buffet chain in the country. So I want to take a minute to theorize as to why that might be the case. The biggest thing that stands out to me that is at the root of it is the fact that Golden Corral has always been a privately owned company with very consistent leadership. Since it has never been on the stock market, it has had the freedom to make major changes when necessary and focus on long-term stability and growth as opposed to short-term profits. Co-founder William Carl was involved with the company as a member of the board of directors for 23 years, while co-founder James Maynard, I believe, may still be involved with the company in some way at 85 years old. He was the original CEO for 16 years before stepping down to run Golden Corral's holding company when he was replaced by Ted Fowler, who had already been with the company for over a decade and served as CEO for the next 25 years. In 2015, he was replaced by Lance Trinary, who had already been with the company for 30 years and remains CEO today. And he has gone so far as to say there's no doubt having consistency of leadership and ownership brings such value to our organization. What I'm trying to say is that Golden Corral has been operated with a consistent vision by people who are personally invested and passionate about its success and I do not think that we can say the same about any of those other major buffet chains.
I also theorize that the company's willingness to reinvest and remodel locations has helped keep them more relevant and up-to-date compared to those others. Obviously that whole bigger location buffet initiative is probably the biggest example of this. But then also in 2000 they started converting to what they call the strata design where you could watch the food being prepared. They introduced the gateway design characterized by a quieter, more relaxed dining room that is bigger, further from the buffet, and features a fireplace. Another theory is that the menu has been more extensive than most competitors. As they put it, Golden Corral's unmatched variety accommodates to most all nutrition needs such as low carb, vegan, paleo, and plant-based diet plans. So, there is something for everybody, including the kids. In 2010, they started introducing cotton candy, which is pretty unusual for a restaurant. In the following year, they introduced the chocolate fountain, or as they call it, the chocolate wonderfall. I guess this can be summarized by saying that most of the mistakes made by the competing buffet chains have not been committed by Golden Corral.
Going back to my list, Golden Corral has had some major issues during the pandemic. Obviously, most restaurants were impacted, but Golden Corral was among the most impacted considering a buffet is more of an in-person community dining experience. Not the kind of place you would think to order from online or have delivered. And potentially, when you think about it, one of the worst places to spread germs with people getting so close to the food and serving themselves from the same utensils. Most of their locations were shut down for a while, causing some of their biggest franchises to file for bankruptcy. Sales were more than cut in half in 2020, while they closed over 100 locations in the following years. They were forced to make a lot of temporary changes that fundamentally altered the customer's experience. They changed it so that the employees had to get the food for the customers who were sitting at the table. Of course, they didn't have drive-throughs already, so they had to kind of meet people in the parking lot to fill orders. It was a mess. I mean, this has to be one of the worst things that can happen to a buffet restaurant and easily the most uncertain period that Golden Corral has ever experienced. But they were able to survive.
Bringing me to the final rise on my list that I'm just going to call surviving. There is of course more involved in it, but to keep it simple, Golden Corral was in a much stronger position than any other major buffet chain going into the pandemic. Competitors like Sweet Tomatoes and Old Country Buffet were not able to survive it. So now there is less competition than ever before. Just based on some of the comments from my videos about those other chains, it seems like a lot of people have switched over to Golden Corral, considering it is one of the only comparable options at this point. Sales have since recovered very close to their previous highs despite operating so many fewer locations, meaning sales per location are stronger than they have ever been. In 2023, the CEO said, "Our company's balance sheet is stronger than it's ever been in our 50-year history. We're completely debt-free now." They even started a fast casual restaurant in Southern Pines, North Carolina called Homeward Kitchen that was rebranded as Golden Corral Favorites. It serves many of the familiar foods in a different format. So, it is another example of the company experimenting with ways to stay up-to-date and capitalize on different trends.
I just want to say that I realize there are mixed opinions out there regarding Golden Corral, but however you feel about the food or the service or whatever else, you have to admit that this is an impressive story. Golden Corral has outlasted their biggest competitors as a budget steakhouse and then did it again as a buffet chain. It could have easily crumbled multiple times throughout its 50 plus year history, but it still exists, potentially stronger than ever before, and I think that is pretty cool.
Let me know in the comments, what are your thoughts about Golden Corral, and how does it compare to those other buffet chains? Would you say that it is a good value given the selection and the quality of the food, or is it one of those places that you would much rather avoid? I am also curious if anybody out there happened to visit while it was still a steakhouse. I know it would have been over 30 years ago, but it would be interesting to hear about the experience and any small elements that might still exist today. And any other thoughts you have about Golden Corral, leave them in the comments. I'd like to hear what you have to say. Thank you for watching.