Share “Olive Garden pins hopes on new logo, menu”

Olive Garden pins hopes on new logo, menu

Published on NewsOK Modified: March 3, 2014 at 2:13 pm •  Published: March 3, 2014
Advertisement

NEW YORK (AP) — Olive Garden has a plan to win back customers: a new logo and yet more menu changes.

In a call with analysts on Monday, executives at Darden Restaurants Inc. expressed confidence they could bring about a "brand renaissance" at the Italian chain with a new look and updated menu that presented food with "flair and sophistication." The changes include more small dishes and the option to mix and match pastas and sauces.

Darden executives also continued to make the case for why it made sense to hold onto Olive Garden and spin off or sell only Red Lobster, rather than keeping the two struggling chains together and separating them from the company's more promising specialty restaurant unit, which includes Capital Grille and Yard House.

"We certainly recognize that industry dynamics have changed considerably over past two years," CEO Clarence Otis said during the call, acknowledging the need to make drastic changes.

The remarks came as Darden Restaurants Inc. reported preliminary quarterly results that fell short of Wall Street expectations as sales continue to slide at its two flagship chains. It said sales are expected to drop 5.4 percent at Olive Garden restaurants open at least a year. At Red Lobster, the figure is expected to fall 8.8 percent.

Customer traffic declines were even steeper, falling as much as 13 percent at Olive Garden in December and 19 percent at Red Lobster in January.

The Orlando, Fla.-based company partly blamed rough winter weather for the results. But Darden has been battling shifting industry trends for years now, with people moving away from casual dining chains where tips for waiters and waitresses push up a meal's cost. Darden has tried making numerous changes at Olive Garden and Red Lobster to better reflect today's eating habits, but the efforts have failed to take hold so far.

Barington Capital, an activist investor that says Olive Garden and Red Lobster should be separated as a pair from Darden's smaller chains, expressed disappointment in the company's latest results.

Continue reading this story on the...