Skift Take
Olive Garden has posted growth for years even as other chains have floundered. If it's not broken...
— Kristen Hawley
Darden Restaurants, parent company of Olive Garden (and others, including LongHorn Steakhouse and Cheddar’s) announced its second fiscal quarter earnings yesterday, and things continue to look up for the group. Same-store sales are up 3.1 percent, nearly double the 1.6 percent analysts expected. Olive Garden, in particular, is seeing continued success thanks to a “focus on simplification and flawless execution,” according to Darden CEO, Gene Lee. This is the 13th consecutive quarter of same store sales growth for Olive Garden.
That simplification and execution doesn’t seem to include a standalone delivery strategy, at least not yet. “We are trying to learn,” Lee said. He says he’s watching all of the third-party delivery services — “We believe someone is going to rise up and create some scale in the space,” he said — and also watching other restaurants that are offering their own delivery services. Currently, Olive Garden does offer catering delivery, and averages $300 per order. “That makes a lot more sense for us to market and pursue than running around delivering $10 entrees at this point in time,” he said.
Olive Garden has teased the idea of eating its food at home with a recent limited-time buy-one-take-one offer. For as little as $13, guests could order one dish to eat at the restaurant and a second to take home. Still, even an offer like that drives people to dine in, and Olive Garden’s impressive growth in its second fiscal quarter is evidence that strategy is currently working.
Other chains are betting big on delivery as part of a larger strategy. McDonald’s Uber Eats partnership has grown wildly in 2017, targeting 10,000 by year’s end. Wendy’s recently launched DoorDash delivery at 2,500 of its locations. On the sit-down side, some TGI Friday’s restaurants offer delivery, too.
