Olive Garden Not Getting Sold Like Red Lobster
Due to diminishing customers, Darden Restaurants recently made the decision to sell their Red Lobster franchise for $2.1 billion. Despite losing a lot business of its own, Olive Garden won’t be sold off.
According to ABC News, the CEO of Darden, Clarence Otis, has more hope for Olive Garden. He claimed that Red Lobster’s problem was an inability to bring in the higher-income customers that other Darden restaurants do, like Longhorn Steakhouse, The Capital Grille, and Seasons 52. Customers were also less willing to pay the increase in prices that occurred across the Red Lobster chain, such as a $1 price jump for the “Festival of Shrimp” special in 2012.
Olive Garden is a different story. The Darden company has confidence that the 830 locations can sustain themselves for the time being. To adapt to the changes in the market and increase business, the Olive Garden chain redesigned their logo. Olive Garden has also been adding new items to the menu, specifically choices that are smaller and lighter. The new “crispy risotto bites” have been added to fill the demand of recent eating trends, according to Darden.
The Huffington Post reported that shareholders for the company were not in complete agreement about how Darden should handle the Olive Garden decision. One of their investors, Barington Capitol, disagreed with Darden’s plans to sell Red Lobster and instead called for the separation of Red Lobster and Olive Garden from the company’s other chains. The hope was that Darden would combine Olive Garden and Red Lobster into a single company and keep the other more successful restaurants separate, to keep them safe from the failures of Olive Garden and Red Lobster. Barington Capitol called the decision to keep Olive Garden within the company “unconscionable” according to the demands of the shareholders. But Darden claimed it didn’t need shareholder approval to determine Olive Garden’s fate.
Examiner reported that Darden still decided to keep Olive Garden even after shares fell 4 percent. Red Lobster will still be open to the public, but it will be owned by the Golden Gate company instead of Darden. Examiner claims that Golden Gate does not plan to close any Red Lobster restaurants but it’s possible some closings will happen no matter what.
As for Olive Garden, things will stay the same for now, unless the adjustments to the logo and menu aren’t enough to bring back business. Fans of Olive Garden would be wise to enjoy their favorite entrees while they can.
