The Plans To Revitalize Olive Garden’s Soft Sales and Traffic
Darden Restaurants Inc., parent company to the 750+ unit Olive Garden restaurant chain had a moderately unpleasant earnings call this past week. While Darden’s portfolio of brands reported a net earnings increase of 19 percent for the fourth quarter, Olive Garden in particular reported a 1.1 percent decrease in both same-store sales and traffic compared to this time last year.
Soft traffic and sales, according to the call by Darden officials, is being blamed on a misappropriation of their pricing strategy. The earnings call even targets “the timing of its [Olive Garden] annual price increase, which occurred early in the fourth quarter of fiscal 2010 but did not take place in this year’s fourth quarter.”
To adress this situation, Darden plans to establish more predictable price points at their Olive Garden restaurants — along the lines of another brand in their portfolio, Red Lobster. The seafood house’s limited-time $15 Seafood Feast proved successful at driving traffic for the brand, and they hope to carry over similar pricing strategies for Olive Garden. [NRN]
What do y’all think about Olive Garden? They pan to open up 35 to 40 new locations in the fiscal year of 2012, think they should do anything different with their price structure? New menu offerings? Don’t change a thing?
