Sunday is no longer a disposable selling day for Darden

Sunday is no longer a day of rest for Darden Restaurants Inc., especially in its fine dining division, with weekend sales increasing since the COVID pandemic, according to Darden CEO Gene Lee.

“Sunday has become a legitimate food sale day, which was really kind of a throwaway day before COVID, unless you’re in convention town and the convention starts on Sunday,” Lee said on Thursday. during a conference call with analysts after the release of the first. earnings for the quarter.

Related: Darden finds offsite demand “stickier than we originally thought”

“Sunday is a really legitimate day now, it took us a few operational adjustments to get used to it,” said Lee, who runs parent company of Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen and other brands.

Same-store sales at Darden’s gourmet brands, which include The Capital Grille, Eddie V’s and Seasons 52, increased 84.6% in the first quarter ended August 29, compared to consolidated same-store sales increases from 47.5% for all its brands. . Olive Garden same-store sales increased 37.1% in the first quarter and LongHorn Steakhouse sales increased 47%.

As the Darden brands faced inflationary pressures on raw materials, Lee said the company was careful not to raise prices and emphasize the value of its casual dining concepts.

“I think we can all agree that a low income consumer will be disproportionately affected by rising inflation and that the consumer constitutes a large part of the makeup of our guests for our casual brands,” said Lee.

“We’re incredibly focused on long-term hindsight, not so much short-term,” he said. “We are making strategic choices, especially in Olive Garden and I will say for Cheddar ‘, [to be] very careful with the prices.

This long-term perspective will be important for the brand’s reputation, noted Lee.

“At some point,” he said, “your average consumer could get paid for a casual meal if it costs too much. … We are thinking about: How to position ourselves to excel in an inflationary environment?

The emergence of the COVID delta variant in midsummer drove off-premises sales in the first quarter, notably to around 27% of sales at Olive Garden. Lee said Darden expected it to drop again but stay in the 20% zone.

“We do some things off the premises without updating,” he said.

However, Darden brands had to limit the amount of off-premises sales to handle kitchen work, he said.

“We need to slow down the offsite activity,” Lee noted. “We have to monitor the number of orders we make every 15 minutes. Each brand has a different way of choking. Each restaurant can strangle differently. But on average – I’ll give you an idea – we only take four takeout orders every 15 minutes. There are many more commands than that. … We must be able to maintain the dining room and maintain the premises.

Darden is looking at some technological tools to help offsite sales, said Rick Cardenas, president and chief operating officer of Darden.

“Our goal is to implement technology that truly reduces friction at every step of the value chain,” he said, “while meeting our customers’ growing desire for choice and personalization. They want the choice. They want to be personal experiences.

Some technologies added in the first quarter were Apple Pay and Google Pay on the Oliver Garden ordering website, adding to the existing PayPal.

“Now, over 25% of our mobile app transactions are paid through PayPal and these other wallets,” he said.

In addition, the company has expanded its “Curbside, I’m Here” capabilities and is considering geolocation. The company is also testing online recommendations for items added to Olive Garden.

Darden executives said they will continue to look at quick-service restaurant businesses and find out what might work in the casual dining space.

For the first quarter ended Aug. 29, Darden reported net income of $ 230.9 million, or $ 1.75 per share, compared to $ 36.1 million, or 28 cents per share, in the same period l last year. Fourth-quarter sales more than doubled to $ 2.3 billion from $ 1.5 billion in the same period last year.

Darden has 1,841 restaurants, including Yard House and Bahama Breeze.

Contact Ron Ruggless at [email protected]

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