Olive Garden finds a light at the end of an empty breadstick basket
When you're here, you're family... Olive Garden should probably update its slogan, since all of its dining rooms are closed: When you're here, you shouldn't be — or When you're not here, you're home (aka, no unlimited breadsticks). Olive Garden parent Darden Restaurants has seen its same-store sales plunge 39% so far this quarter (and the quarter's not over). Why the long breadstick?
- 100% of its 1.5K eating spaces have been closed since mid-March — that includes Olive Gardens, Capital Grilles, and LongHorn Steakhouses.
- Olive Garden sales progressively plummeted 60%, 65%, and 71% for the last three weeks in March. Darden stock is now worth half its January value.
A light at the end of the basket... 99% of Olive Gardens are open for takeout — and its takeout sales have jumped 142%. LongHorn Steakhouse's have more than 3X'd. Couple that with news that Darden slashed executives' pay in half and that it has $1B in cash on hand — the stock jumped 12% Tuesday.
We're living in an omnichannel world... And Darden is an omnichannel girl. The ability to nimbly service customers both on and offline is critical in the corona-conomy and beyond. If diners can get a satisfactory Olive Garden experience at home, they'll keep shelling out the $$$ even if all the dining rooms are closed. Flexibility to seamlessly jump from in-person to takeout to online-delivery is key — and retailers like Target and J. Crew already do it.