#Olive garden short menu prices driver

An example of this change: Olive Garden chose to shift from nine to six deals last March, including removing the Buy One, Take One deal for the time being. Lee said guests reacted positively to Olive Garden’s menu, and its Chicken Alfredo entrée that now contains 50 percent more chicken. The reduced incentives also had a positive impact on mix. What that means is consumer preference drove the result. It was comprised of just 1.8 percent pricing. But how that unfolded tells the bigger story. Olive Garden’s comps in Q3 were fueled by a check average increase of 4.2 percent. Excluding Darden, the industry’s total sales rose 2.1 percent in Q3 same-store sales lifted 0.8 percent and industry traffic declined 1 percent. The brand continued to reduce deals this past quarter and still sailed industry benchmarks across the most critical metrics. Also worth noting: Q1’s comps of 5.3 percent were Olive Garden’s best since at least 2008.ĭarden CEO Gene Lee’s belief that Olive Garden could thrive without a heavily incentive-laced strategy was spot on. Total sales upped 5.3 percent as same-store sales grew 4.3 percent and comparable guest counts returned to positive territory at 0.1 percent.

All that said, same-store sales still rose 3.5 percent that quarter.Īccelerate to the present and Olive Garden just reported its 18th consecutive period of same-store sales growth in the third quarter that ended February 24. It could quickly buzz the top line far more effectively than if it was trying to lap and build on previous deals.

If-and when-the industry and consumer shifts again, Olive Garden would have a powerful sales driver at the ready. And, not to mention, put an ace in its pocket for future use. It wanted to shift focus to sales profitability and move away from the seasonal fluctuations that accompany promotional spikes. What made this so unique, at least from the perch of casual dining, was that Darden essentially took the hit on purpose because it could. It ran 16 fewer weeks during the quarter and that included some weeks where Olive Garden presented multiple offers in the comparable period. Last quarter, the 860-unit chain saw comparable guest counts decline 0.8 percent as it pulled back incentives, primarily email promotions. Let’s just take a two-quarter sample into consideration. To say Olive Garden has landed on an effective menu strategy wouldn’t do it justice.

#Olive garden short menu prices driver