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Keeping things simple isn’t always the easiest track to take for a loyalty marketer. But, for Darden Restaurants−which owns several casual dining restaurant chains including: Olive Garden, LongHorn Steakhouse, Bahama Breeze, Seasons 52, Eddie V’s Prime Seafood, The Capital Grille, and Yard House−simplicity of processes translates to customer loyalty and brand advocacy.
Darden Restaurants CEO Gene Lee addressed this point during Tuesday’s third-quarter earnings conference call.
“Same restaurant traffic was up 3% for the quarter,” Lee said, according to Seeking Alpha. “Key drivers of this performance include an improved guest experience delivered through proper staffing and the simplification of processes and procedures; culinary innovation that builds on the brand equities and flavor profiles that our loyal guests enjoy most, as seen with our successful flavorful pastas and Create Your Own Tour of Italy promotions; and continuing to meet our guests’ needs for convenience, with the national launch of large party catering delivery. This is an enhancement of our successful OG To Go platform, which has experienced a 2-year growth rate of over 40%. Year-to-date, OG To Go sales represent 10.5% of our total sales.”
Lee said he’s confident that the company’s overarching strategy continues to be effective.
“Our focus on food, service, and atmosphere, has improved the perceived value of the Olive Garden dining experience,” he explained. We have anchored our lunch and dinner menus with compelling price points, $6.99 at lunch and $9.99 at dinner, which provides everyday affordability. This enables us to deliver promotional value with a wide range of price points. Olive Garden’s relentless focus on delivering great guest experiences will allow us to further enhance our perceived value. This will continue to be the key to our ongoing strategy as we build on the momentum we are experiencing.”
Darden Restaurants’ operations-focused philosophy continued to drive strong performance across its brands. Total sales from continuing operations were $1.85 billion, which represents a 6.7% increase over the third quarter last year.
Olive Garden’s positive sales and earnings momentum continued during the quarter. Same restaurant sales grew 4.9%, outperforming the industry, excluding Darden, by more than 600 basis points. It marked the sixth consecutive quarter of same restaurant sales growth at Olive Garden.
LongHorn Steakhouse’s same restaurant sales increased 2.7%, the 12th consecutive quarter of growth, outperforming the industry, excluding Darden, by over 400 basis points.
“We pulled back on our price-pointed activity and optimized our media spend to be more effective, which contributed to LongHorn’s 29% increase in segment profit and helped to offset the incremental expenses associated with the recently completed real estate transactions,” Lee said. “Additionally, we will continue to invest in menu enhancements and reallocating labor as we further simplify operations and optimize our media spending. Finally, LongHorn continues to deliver communication that resonates with our guests through its You Can’t Fake Steak advertising campaign, which was recognized in December when Ace Metrix named LongHorn the Brand of the Year for casual dining for the second year in a row. We are excited about the momentum we have gained and we started to rebuild our pipeline for new restaurants.”
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