Red Lobster and Olive Garden owner Darden plans changes

BIZMOLOGY — Darden Restaurants, parent company of seafood-segment leader Red Lobster and top Italian-themed concept Olive Garden, plans to overhaul menus at both of its flagship chains later this year. Sales have slumped in recent months, coinciding with decreased guest traffic and a measurable drop in customers’ discretionary spending at Darden’s nearly 800 Olive Garden restaurants and its 700-plus Red Lobster locations.

Olive Garden and Red Lobster will introduce new “core menus” later in 2012. Red Lobster is hoping to pull off the most drastic transformation of its menu and brand in more than 10 years, with its restaurants offering more non-seafood items and several seafood options for less than $15.

Darden spends heavily on television advertising. The company’s flagship chains also utilize discount pricing and special offers to win business against the competition, including Applebee’s, Chili’s (operated by Brinker International), and Outback Steakhouse (OSI Restaurant Partners).

Olive Garden and Red Lobster will both begin to stress value and affordability over specific dishes. Earlier this year Olive Garden lowered its price points on several dishes and the chain will step up efforts to get the word out through advertising.

Darden also operates the LongHorn Steakhouse chain, with about 370 outlets, and several other dining concepts such as The Capital Grille (an upscale steakhouse) and Bahama Breeze (Caribbean food and drinks). The company continues to look outside of the US for growth, and has plans to develop Olive Garden and LongHorn Steakhouse locations in Puerto Rico. A Red Lobster opened in Dubai in July 2011.

Most of the company’s international growth emphasis has been on its Olive Garden and LongHorn Steakhouse chains. In the US, Darden has been remodeling many of its Olive Garden and LongHorn Steakhouse units in lieu of adding new locations. Darden also restructured its corporate office earlier in 2012, eliminating about 40 positions in departments such as finance, human resources, supply chain, and building services.

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Photo by The Vault DFW used under Creative Commons License.

 

 

 

Michael McLellan

Michael McLellan covers the business of restaurants, marketing, media, technology, sports, and more for D&B and Hoover's. He is a graduate of the University of Texas at Austin's Radio-Television-Film program. Follow him on Twitter.

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Comments

  1. Tracey Panek says:

    The company knows their bread and butter is fine dining for the fast food crowd. If they’re going for “value and affordability” over quality, I guess we can expect to see a bunch of food porn commercials showing giant platters of 4,000 calorie meals for $9.99!

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