2/28/2013 7:14 PM ET|
Olive Garden is tearing down its Tuscan decor
Parent company Darden is trying to revamp the Italian food chain with a new look, updated logo, new uniforms and healthier fare.
Welcome to The O.G. In an attempt to turn around the flagging performance of its Olive Garden chain, parent company Darden International (DRI) is tearing down the stone-and-wood archways that have been in place since 2000 and sprucing up the logo.
After installing new Olive Garden President Dave George in January, cutting quarterly expectations for both its Olive Garden and Red Lobster chains and suggesting to The Associated Press that fewer Olive Gardens will open in the next year, a struggling Darden is getting ready to gut its Italian dining cornerstone down to the bottlomless breadsticks. The chain is promising to vary its menu, lower its prices and make it healthier and more "relevant." Unfortunately, it has done all this before with limited effects.
Back in October, Olive Garden introduced 600-calorie menu items and swapped its "When You're Here, Your Family Slogan" for the peppier "Go Olive Garden." The result? Olive Garden sales fell 1.2% for all of 2012. Now the chain is swapping the staff's white shirts and wide ties for the same black button-down shirt and black slacks customers see at just about every other casual-dining chain.
Extracting what remains of Olive Garden's personality may not solve the chain's personality crisis. Since Olive Garden's heyday in the early 2000s, fast-casual chains like Chipotle (CMG) and Panera (PNRA) have been chipping away at its customer base. NPD Group says casual-dining sales in general have been dropping steadily since early 2010 as diners 18 to 47 years old flee in droves. Unsustainable price specials like 2-for-$20 meal deals have eroded casual-dining's value.
While diners are spending 5.5% more at casual-dining chains that offer healthier options, they're spending a lot less at places like Olive Garden overall. Darden has repeatedly placed the blame for woes at Olive Garden and its other chains on Obamacare, payroll taxes and just about everything besides its food and prices. It's just dressing its old problems in some new clothing.
So, farewell fake Tuscan farmhouse and funny waiter ties. The American dining public that's slowly ditching Olive Garden for fast-casual and specialty chains like Buffalo Wild Wings (BWLD) eagerly awaits the staid, stainless steel specials factory that's coming next.
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