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Why the Pandemic Could Turn Darden Into an Even Bigger Juggernaut

Restaurants had to choose to either conform to new COVID-19 health guidelines or stay closed. Which changes will continue to be the new normal?

Photo Courtesy of FSR Magazine.

Restaurateurs and industry experts have continually asked this question throughout the COVID-19 catastrophe: What disruptions will become permanent? Is the “new normal” all-inclusive, or will it pick and choose?

For Darden CEO Gene Lee, the answer isn’t complicated. While the pandemic pressed the casual leader’s entire business, it also opened a “once-in-a-lifetime opportunity,” Lee said. A chance “a lot of us had been waiting for.”

“The most prominent and the most significant thing we've done is streamline the menus and our processes and procedures, and that's forever,” Lee said.

Darden introduced disposable, pared-down menus systemwide, which could be switched out quickly if needed. But what the company also learned was it could squeeze enough variety

on the menus to satisfy consumer demand.

Lee said, “I think that's what's going to be the lasting change. It's going to have significant impact two years, three years, four years from today.”

Darden rethought processes and procedures for its “back-to-basics” operating philosophy. Lee said they eliminated a lot of prep work that will never go back in.

There’s already proof it’s working. Despite blended same-store sales dropping 47.7 percent in Q4, Darden turned in slightly positive restaurant-level margin at 0.9 percent.

Photo Courtesy of FSR Magazine.

For the first three weeks of Q1, same-store sales are down 31.3 percent at Olive Garden, which led to Darden’s initial guidance of negative 30 percent for the period.

LongHorn’s off-premises sales boosted its recovery by hitting $28,653, or 41 percent, of pre-virus volumes in the third week of April—nearly four times higher than early March. Today, with 82 percent of the system’s dining rooms running, off-premises is rolling at slightly less than $20,000 per week with same-store sales down 13.8 percent.

Darden is installing temporary barriers in about 100 restaurants to try to improve efficiency. It will analyze progress and decide how many more restaurants to add.

As of June 22, Darden said 91 percent of its 1,700 dining rooms were open with at least limited capacity.

Curbside popped up as a makeshift drive-thru option in parking lots, and Darden is looking at making it even more streamlined through technology, with a focus on payment.

2020 FSR Magazine.

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