Despite a major profit slump throughout the casual sit down restaurant industry, Olive Garden has enjoyed eight consecutive quarters of same store sales growth throughout the U.S.
Spurred in large part by viral promotions like the Never Ending Pasta Pass, cutting back on breadstick waste and boosting its carry-out business, America’s most well-known Italian chain is breaking the mold after a serious comeback.
Just last week, fast-casual sandwich chain Cosi declared bankruptcy and at least 10 others, including Old Country Buffet and Johnny Carino's, have filed for Chapter 11 since Dec. 2015. Nation’s Restaurant News has also reported that two-thirds of restaurant company stocks are down this year.
Fans of these casual eateries may lament when these restaurants closing up locations to cut costs, but Darden Foods (Olive Garden’s parent company which also owns Longhorn Steakhouse among several other brands) isn’t shedding any tears.
In a call with investors Tuesday, Darden Chief Executive Eugene Lee said that the sheer number of restaurants around today mean that competition has reached unprecedented levels. The solution? More bankruptcy.
“I’m hoping that more inventory will come out of the system,” Lee said on the call, according to Business Insider. “We’ve seen some big announcements of closures lately and I also think that if you drive down the road you’re starting to see more restaurants closed. You also see more restaurants opened, but we could use some inventory to come out. That would be helpful.”
In other words, Lee is pretty excited about the dire situation many major food chains are facing. But just a few years ago, the breadstick-slinging chain was in pretty dire financial straights itself. Now, however, there's no looking back.
According to information reviewed on the investor call, Olive Garden posted same-store ales growth of 2 percent last quarter. This summer, the chain began holding “never ending family table” events in different cities across the country. Borrowing a leaf from the pop-up restaurant trend, guests are invited to sample new menu items at communal tables set up outside.
Lee said the events have been popular with millennials. He also cited new menu items including pepperoni fettuccine and Italian pot pies as being growth drivers in the quarter, reports The Wall Street Journal.
So what lies ahead for Olive Garden lovers? The classics won’t be going away anytime soon and Lee says the restaurants will continue to improve on overall customer experience.
“We are running better restaurants today than we were in the past,” Lee told investors. “This is a momentum business and I think this business has that momentum right now.”