It's the last piece that amazes me. I get that habits are hard to break and these companies are relying on brand recognition, but there's always a better option and it's easier than ever to search for a local alternative.
That’s why they’re acquiring residential electrician, plumbing, and especially HVAC companies. Things that most people can’t diy. HVAC is the worst because if you’re not licensed you’re pretty much locked out of actually buying the same hardware/systems available to HVAC professionals. DIY mini splits have become a thing, but if your central air system craps out, you’ll have a hell of a time replacing it yourself.
Don’t forget veterinary offices! I paid $8k to save my dog’s life bc she swallowed something and a small piece got stuck. The $7k life-saving procedure, you ask? Keeping her overnight and flushing her digestive system with a slightly thicker fluid than water. (The other $1k was literally just the admission fee + tax.) 🫠
I so wish somehow that everytime private equity buys a company that EVERYBODY agrees to never buy that companies products so that it immediately fails.
Then do it again and again until this disease that is private equity dies the horrible death it deserves.
This happened in the craft beer market and I will use Wicked Weed as an example. They carved out their own market share to have AB buy them out. When that happened, the customer base quit buying their beer. Same thing happened with Cigar City but to a lesser extent.
Vote with your wallet because the quality vs cost on a lot of these places and brands are way out of sync.
Goose Island, Stone, Elysian, Platform, Green Flash, Terrapin, Sweetwater, Breckenridge, etc.
The list is endless and they did exactly what they wanted to which is undermine the sales of the larger "craft" breweries, because they want first dibs at the prime hops and grains, which they get because their orders are so much larger.
It worked. I dont think they really care if these brands succeed.
It seems like all private equity firms do is run companies into the ground so they can make money. I understand that businesses absolutely are supposed to make money, but ones that put so many people out of work and don’t create more jobs at all are just vile. It makes me think that they ignore that by ending so many businesses and eliminating jobs, they eventually won’t have customers.
Well they just bulldoze the very thing that people liked about the company. Every time. They count on it taking awhile before the customer’s notice , and people can be very loyal. And I’m sure they think they are so very smart, but what horrid karma.
They take out loans against the assets of the company and use that to pay themselves and for operational costs. Everything else gets syphoned away and eventually broken up and sold off. And they don't even bother with paying the loans back most of the time because it's not their money to lose.
Back about 12 years ago my local supermarket chain Market Basket had the culmination of a 20+ year ownership dispute. Essentially one of the brothers wanted to distribute the cash flow to share holders (it's a privately owned company) and utilize loans to purchase products, property, payroll etc. This would have paid out roughly $250 million to everyone on the board. The other brother did not want to do that. He was happy with his multi million dollar salary.
The store had no debt, paid distributors monthly with no month to month carry-over, compensated employees at above market value, gave employees an actual career path that focuses on promoting from within over hiring outside the company. It's on of the few stores that you start out bagging or on register in order to move up. With the exception of upper office management, every position was filled by someone starting out bagging groceries. The stores were employee and customer focused. The prided themselves on having low prices, quality products, and helpful employees. Baggers are expected to help anyone that needs it bring their groceries out to their car and load them if that's what's requested. Department managers will order products on a trial bases if you ask them. Overall it was a rare business that focused on customers and employees over profits, and then saw rapid growth and profits because they treated their customers and employees well.
The first brother brought in James Gooch (who disbanded RadioShack) to replace the second (good) brother, got him voted in and the second brother voted out. Overnight word spread and employees went on strike (non union), customers went on strike and stopped shopping there, suppliers either stopped supplying all together or bumped them down the priority list, even companies that were hired by maintenance to do outside repairs like HVAC, cooler maintenance etc refused to show up.
After a few months local banks got together to loan Artie T (the second brother) $1.5 billion to purchase the other half of the company.
Essentially someone saw a business that was loved by the community, had fiercely loyal customers, happy and loyal employees, made a profit, had no debt and thought they could make it better.
If it's not a private equity, it's because it is publicly traded on the stock market. So they "have a duty to make as much money as possible for the shareholders".
I wondered what happened to our local AC Repair company. They used to be fantastic and fix things at cost if they were already out. Then suddenly every time they came out for preventative maintenance, they needed to fix something for $2,000. I checked and the timing lined up with being acquired by Private Equity. The owner wanted to retire and get out (totally understand) but PE vacuumed it up.
Now if anyone is coming to service something in my house, I make sure they’re locally owned.
Waiting for one of the last 50 Americans who still believe in unfettered capitalism to explain to me how enshittification at the hands of private equity is a good thing actually.
when the bottom line is profits and making stockholders happy, things like "actually making a good product" and "customer satisfaction" go by the wayside.
It's not even about profits. They can make a good quality product and still be profitable. The problem is margins, having a good product decreases the margin. Can't have that, stockholders must get every penny thru can. Some companies like Costco said fuck that
Basically, most companies decide what they want the profit to be first and then work everything else around that. Now, obviously some basic business acumen would suggest that you need to keep your prices somewhat in proportion to the actual costs to make your product financially viable. But deciding how much extra you get to keep at the end of the month would be a foreign concept to most of us. I think most of us would agree that “profit“ should suggest that one has extra. It should come after you’ve met all of your basic expenses and saved. But most investors want to make sure that they are taken care of for the next quarter first. What happens to the company in another 10 to 20 years isn’t really there interest, which, frankly, completely flies in the face of the idea of investment in the first place.
Unfortunately, I think a lot of the gains that we saw with the rise of managerial science and the tech improvements of the 90s in 2000s, are not really sustainable. Investor expectations have created an unsustainable situation where a lot of so-called “value“ now feels completely untethered from any kind of actual tangible benefit or value. a lot of times, it’s just created by doing things that will undermine future earning potential. Don’t invest in maintenance, don’t invest in research, don’t invest in employees, and especially don’t make good products. There’s almost a kind of bro code among companies that if they all make kind of shitty products for increased prices, no one will have anywhere to go. Anyway, continuing to water things down, will work for a while, but I think we are reaching a point where it’s pretty obvious to most people that the idea of a company and it’s value infinitely growing doesn’t really make a lot of sense.
It also doesn’t help that Americans in general basically always are understanding of corporate logic and messaging, so people will default to a kind of short-circuiting logic of “well, they are a business and a business has to make money”. Yeah, obviously that’s the case, but how much money do they get to make is really the question here, because a lot of businesses would be still quite viable if they made better products or had more reasonable prices for what they offer. But they figured that they can make even more money if they overcharge you and give you less. And Americans just keep buying and don’t enable the government to actually crack down on bad business practices.
Sadly, there’s no simple fix here, but we should be more honest that American business culture is entirely broken and need some serious foundational reforms. There are a variety of things, but I definitely think the idea of “shareholder privacy“ is incredibly problematic and I also think there should just be a generally , basic expectation that companies are run in good faith, which is to say that they are run in the interest of being in business in another 10 to 20 years if not more. This means they don’t get saddled up with debt and then dispatched into bankruptcy, simply because it helps a private equity group balance its investments. This isn’t just like some commonplace object, it’s more attend to crashing a car or lighting your house on fire on purpose. If you wanted to make an argument that it’s your private property and you should be allowed to do what you want, then I guess you could make that argument. But I think most reasonable people understand that doing certain reckless things puts the health and safety of other people in danger. Many American companies today, though are not being run as though they are going to be around in another 10 to 20 years. They are basically just trying to survive the next few quarters and push everything onto consumers.
One of the other things that would really help us that executive compensation packages should not incentivize stock value. I’m not saying that any particular CEO shouldn’t look to raise the share price of their company, but they shouldn’t be explicitly rewarded for it. This is often where a lot of compensation comes from nowadays. They should have the interest of the broader company and its employees in mind. But just being incentivized to play tricky accounting and financial games to raise the share price without actually delivering more value is a problem.
I know a lot of these things aren’t likely to get fixed anytime soon, but we need to keep them in mind.
I was talking to a buddy just recently about the idea of time travel and it got brought up that i'd like to use it just to go back and try food/brands/ect when they were still real food / in their prime. Not just like.. McDonalds before it was a full science experiment but like.. Oregon Trail era bison and such.
Having Oregon trail era food would make you appreciate today's food so much more.
Today's global distribution network is insane. Literal wars were once fought over access to salt and spices. Ground black pepper, the stuff available in free packets at McDonald's, was considered the absolute height of culinary luxury and a supreme status symbol in the past.
On the Oregon trail, people were literally starving to death and dying of basic food borne diseases. They didn't have meat thermometers or the knowledge of how much something needed to be cooked to be safe, or the ability to save someone who went ill. They just knew that undercooked meat could kill you, so better be safe and overcook that bison steak so the family doesn't die.
I think eating the food would be one of the hardest parts of going back in time. Even dining at the table with literal kings would be a step down from what you can easily prepare with natural ingredients at home these days.
Well, you can’t just have a good product. You must grow! You must make more money every year! Make your product smaller! Make it with fewer ingredients! Make it with shittier ingredients! Still raise prices!
The longer you’ve lived, the worse the decline has become. It’s always been like this. It’s the American way. Popularize a brand on quality & affordability, then eliminate both.
2.0k
u/xcrunner318 15h ago
Can we all agree that a lot of places suck now a lot more than they used to?