Make us your home page
Instagram

Olive Garden's parent company rethinks image change to focus on deals

NEW YORK — After new ad campaigns touting the quality of its food failed to spark sales, the parent company of Olive Garden and Red Lobster is retooling its strategy to attract diners with more promotional deals.

The shift comes after Orlando-based Darden Restaurants earlier this fall moved to update the image of its flagship chains and appeal to younger diners in their 20s and 30s, who increasingly prize fresh, high-quality ingredients. The problem is that many of those same diners also want cheaper prices and convenience, reflecting the rise of chains such as Chipotle Mexican Grill and Panera Bread, which offer food that's a step up from traditional fast food for slightly higher prices.

To address the "affordability many guests need right now," Darden plans to dial back on its efforts to build revamp the image of its chains for now and increase the frequency of promotions that underscore value, said Drew Madsen, the company's chief operating officer. He declined to specify the exact nature of the revamped strategy, however, noting that the element of surprise is critical in a "highly competitive" industry that is once again expected to see only modest growth in the year ahead.

At Olive Garden, executives noted that a "Dinner Today, Dinner Tomorrow" promotion didn't clearly communicate the nature of the deal, which gave customers who ate at the restaurant a free second meal to take home.

In cutting its forecast for the year earlier on Dec. 4, Darden also said that it was hit by a publicity backlash from tests intended to gauge how it could limit costs for workers' health care.

Starting in 2014, big employers such as Darden will be required to provide health insurance to full-time workers.

The company had tested hiring more part-time workers and replacing full-time workers who left with part-time workers in select markets to gauge how it could mitigate those costs.

Darden CEO Clarence Otis said the media coverage was a "secondary issue" that hurt the quarterly results. He said the coverage "misinterpreted our actions as a stand against health care reform." The company has since said it will not move any full-time workers to part-time status as a result of the regulations.

>>Fast facts

Earnings fall

Darden's fiscal second-quarter net income fell 37 percent to $33.6 million, while total revenue for the quarter climbed 7 percent to $1.96 billion for the period, meeting Wall Street's forecast. But for U.S. restaurants open at least a year, a key measure, revenue fell 3.2 percent for Olive Garden, 2.7 percent for Red Lobster and 0.8 percent at LongHorn Steakhouse.

Olive Garden's parent company rethinks image change to focus on deals 12/20/12 [Last modified: Thursday, December 20, 2012 10:25pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Appointments at the Crisis Center of Tampa Bay and World of Beer highlight this week's Tampa Bay business Movers & Shakers

    Business

    Non-profits

    Tampa Bay Watch, Inc., a 501 (c)(3) non-profit organization dedicated to the protection and restoration of the marine and wetland environments of the Tampa Bay estuary, has announced two new employees. Pamela Arbisi is the new development director. Her responsibilities include …

    Scott Bendert has joined the Crisis Center of Tampa Bay as the non-profit organization's Chief Financial Officer. [Company handout]
  2. Tampa's Homeowners Choice seeks to offer flood insurance in other states

    Banking

    Tampa-based insurance company HCI Group Inc.'s subsidiaries are trying to expand their flood insurance offerings beyond Florida. HCI has filed with regulators to offer flood coverage in Arkansas, California, Maryland, North Carolina, New Jersey, Ohio, Pennsylvania, South Carolina and Texas.

    Tampa-based HCI Group is trying to expand its flood insurance offerings to other states. Pictured is Paresh Patel, CEO of HCI Group. | [Courtesy of HCI Group]
  3. Home of Tampa Bay Lightning GM Steve Yzerman hits market at $3.45 million

    Real Estate

    TAMPA — The Davis Islands home of Tampa Bay Lightning General Manager Steve Yzerman is back on the market for $3.45 million after a brief hiatus.

    The Davis Islands home of Tampa Bay Lightning General Manager Steve Yzerman is on the market for $3.45 million. [Courtesy of Hi Res Media]
  4. Trigaux: Halfway through 2017, a closer look at six drivers of the Tampa Bay economy

    Business

    We're nearly halfway through 2017 already, a perfect time to step back from the daily grind of business and ask: How's Tampa Bay's economy doing?

    Is there one theme or idea that captures the Tampa Bay brand? Not really but here's one possibility. The fun-loving annual Gasparilla "Invasion" of Tampa is captured in this photo of 
The Jose Gasparilla loaded with pirates of Ye Mystic Krewe of Gasparilla on its way this past January to the Tampa Convention Center. In the future a vibrant downtown Tampa or St. Petersburg may be the better theme. [CHRIS URSO   |   Times]
  5. Will new laws protect condo owners from apartment conversions and rogue associations?

    Real Estate

    Danny Di Nicolantonio has lived in St. Petersburg's Calais Village Condominums for 33 years. Annoyed at times by the actions, or inaction, of the condo board and property managers, he has complained to the state agency that is supposed to investigate.

    That has left him even more annoyed.

    A bill passed by the Florida Legislature would affect places like The Slade in Tampa's Channelside district, where condominium owners have battled a plan to convert homes into apartments.
[Times file photo]