Tuesday, July 4, 2017

Olive Garden: Price Drives Millennials Adoption

Reading the industry trade magazines one might think you need a rocket scientist to run a chain restaurant today or understand to understand their market positioning.  The simple fact is the old adage KISS (keep it simple stupid) works and works well.  Tacoma, WA based Foodservice Solutions® Grocerant Guru® Steven Johnson as regular readers of this blog know says give customers what they want at a price that’s fare and you will have ongoing top line sales and bottom line growth.
Olive Garden’s same-store sales increased 4.4 percent in the fourth quarter ended May 28, parent company Darden Restaurants Inc. said on last week.  It was the 11th consecutive positive quarter for the casual-dining Italian chain, and arguably its best. Darden CEO Gene Lee clearly believes in KISS.  
Leveraging Price has had its benefits for Olive Garden according to our own Grocerant Guru® including attracting the highly coveted Millennials consumers. Lee stated “We made the strategic choice to underprice to inflation, so we’re underpricing our competitors,”… “We have some large competitors out there donating significant share,”… ““We have a more compelling offer.” 
 Lee continued “Contrary to popular belief, Millennials still like going to restaurants,” … “Millennials still want to come to casual dining. Thirty percent of our guests are Millennials, compared to 24 percent of the overall population. So we over-index with Millennials.”
Darden has also simplified operations. Simplifying has helped improve service at the store and made the chains more desirable for consumers. LongHorn Steakhouse and Olive Garden started simplifying their operations three years ago according to Lee. 
“Don’t underestimate how simplifying the business helped us improve execution,” Lee said. “That’s been key to guest count growth. Better execution through simplicity.”  Foodservice retailers must understand that the price, value, service equilibrium has to be in balance or your bottom line bounce! Are you giving consumers what they want or what your want?

Invite Foodservice Solutions® to complete a Grocerant Program Assessment, Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869

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