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Olive Garden, Darden's Slightly Sagging Star, Needs a Renaissance

As Darden Restaurants (DRI) remains on track to spin off its struggling seafood chain, Red Lobster, most of the company’s hopes will soon lie within Olive Garden. Yet the casual Italian chain—which now represents nearly 40 percent of Darden’s 2,100 restaurants—has struggled, too. Same-store sales dropped 1.2 percent in fiscal 2012, followed by a further 1.5 percent drop last year. To reverse the trend, Darden has plotted a “brand renaissance” that will include a new logo and menu, with a focus on “today’s Italy.”

Olive Garden's new logoCourtesy Darden Restaurants, Inc.Olive Garden's new logo

That’s how Olive Garden President Dave George described the upcoming transformation during a conference call on Monday, emphasizing fresh ingredients, simply presented food, and “a natural, warm and inviting aesthetic.” The changes to the menu, design, and service aim to “evoke flair and sophistication that is very Italian” and offer “a restaurant experience that is a nicer place than the price suggests,” he added.

The new menu, unveiled last week, expands the “Tastes of Italy” section with small plates such as the new Parmesan Olive Fritta. It also adds light options—which include anything under 575 calories—that include a 6 ounce filet mignon and specialty items like salmon bruschetta.

About 75 Olive Garden restaurants will be remodeled in fiscal 2015, with an additional 125 or so scheduled over the following two years. The interior-focused remodel was outlined in an investor presentation (PDF).  The chain redesigned staff uniforms last year.

Darden Investor Presentation

To modernize its service, Olive Garden also plans to add online ordering, car-side delivery, and large order delivery in fiscal 2015.

Darden operates 834 Olive Garden, 705 Red Lobster, and 445 LongHorn Steakhouse restaurants, as well as dozens of Capital Grille, Bahama Breeze, Seasons 52, Eddie V’s, and Yard House restaurants, according to its most recent quarterly report.

Wong is an associate editor for Bloomberg Businessweek. Follow her on Twitter @venessawwong.

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