Olive Garden, a popular casual dining chain, has been facing a decline in same-store sales for the past few quarters. The chain saw a 2.9% decrease in sales, mainly due to a drop in traffic after July 4th. This decline in sales surprised the executives at Darden Restaurants, the company that owns Olive Garden, prompting them to take action to improve the situation.
To address the decline in sales, Olive Garden has decided to focus on offering more value to its customers. They have brought back their popular Never-Ending Pasta Bowl promotion earlier than usual and extended it for three weeks. This promotion has been well-received by customers, with many ordering the $13.99 bottomless pasta dish at a higher rate than last year. Olive Garden CEO Rick Cardenas mentioned that the promotion is popular across different income brackets.
In addition to the promotion, Olive Garden is also planning to emphasize its menu prices in upcoming advertising campaigns. The chain aims to highlight the fact that their prices are generally lower than other restaurants, especially for customers who may not be familiar with the brand. Olive Garden is also reintroducing two fan-favorite menu items, Steak Gorgonzola Alfredo and Stuffed Chicken Marsala, with higher-quality ingredients to attract more customers.
Furthermore, Olive Garden is making a significant change by partnering with Uber to offer on-demand delivery services. This move marks a shift for the chain, which previously did not offer delivery services. The partnership with Uber will allow customers to order delivery through Olive Garden’s website and app, with Uber Eats drivers fulfilling the orders. This new service is expected to be an “incremental long-term sales driver” for Olive Garden, as it will cater to customers who value convenience.
Moreover, Olive Garden plans to work on improving the speed of service in its restaurants to meet the growing demand for faster dining experiences. Cardenas mentioned that full-service restaurants typically score poorly on speed, and Olive Garden sees an opportunity to enhance the dining experience without making guests feel rushed. While details about how this will be achieved are scarce, it is likely to involve operational changes, new technology, and additional labor.
Despite the decline in sales at Olive Garden, Darden Restaurants’ other brands, such as LongHorn Steakhouse, have been performing well. LongHorn Steakhouse saw a 3.7% increase in same-store sales, while the fine dining segment struggled with a 6% decrease. Darden’s other chains also experienced a 1.8% decline in same-store sales.
Overall, Olive Garden is taking proactive steps to address the decline in sales and attract more customers. By focusing on value, menu prices, new menu items, delivery services, and faster service, the chain aims to improve its performance in the coming quarters and regain its position in the casual dining industry.
