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The popular Italian restaurant chain Olive Garden has kept price increases well below the rate of inflation in recent years, but parent company Darden Restaurants said this week that Olive Garden customers can expect menu prices to rise in the near future.
Darden CFO Raj Venham told analysts on the company’s earnings call on Thursday that Olive Garden’s menu prices will be “more in line with inflation” this year in the range of 2.5% to 3% over the next four quarters.
A sign is displayed in front of an Olive Garden restaurant on June 22, 2023 in Chicago, Illinois. (Scott Olson/Getty Images/Getty Images)
Venham said Olive Garden has kept its pricing “very conservative” over the past five years, keeping prices about 20% below what the Consumer Price Index (CPI) has increased by nearly 23% over the same period.
“We feel like we’ve done a lot of work to keep our prices low and we’ll continue to do that,” he reiterated, noting that Olive Garden raised menu prices by about 1 percent in the last quarter.
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Olive Garden’s same-store sales have fallen for two straight quarters, dropping 1.5% last quarter and 1.8% the quarter before that, but Darden’s profit beat Wall Street expectations thanks to strong sales at its LongHorn Steakhouse restaurants.
A customer enters an Olive Garden restaurant on December 9, 2022, in Pittsburgh, California. (David Paul Morris/Bloomberg via Getty Images/Getty Images)
Darden CEO Rick Cardenas said on a conference call that consumers are now “generally concerned about inflation and increasingly concerned about the job market,” noting that Olive Garden’s sales to customers below the median income fell last year.
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He said Olive Garden has “priced itself much lower” over the past year than Darden’s other brands and the restaurant industry as a whole for many years.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| dry | Darden Restaurants, Inc. | 152.06 | -2.23 | -1.44% |
Darden Restaurants, Inc.
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“Operators that deliver on their brand promise and values will continue to appeal to consumers despite economic challenges, and that’s what we’re focused on,” Cardenas said. “We’re focused on providing great value and a great experience to consumers who come to our restaurants and spend their hard-earned money, and have them tell others to come back.”
