Olive Garden’s Never Ending Pasta Pass may have sparked a viral trend but business at the Italian chain is booming thanks to a few simple changes.
After years of declining sales, the Orlando, Fla.-based pasta chain just posted its best quarterly sales performance in recent months, with same-store sales rising 6.8 percent last quarter, reports Nation's Restaurant News.
The chain had attributed its sales slump to an overall decline in spending on casual dining. But the company also admitted to slow service and internal disagreements about its superfluous unlimited breadsticks policy.
But the past two years have brought significant changes to chain, says Olive Garden CEO Gene Lee.
“We’re just running better restaurants today,” Lee said during the company’s earnings call Tuesday. “I don’t think we should discount the importance of ensuring we’re properly staffed, our teams are properly motivated, simplifying the operation, reducing the size of the menu, processes and procedures.”
In addition to better staffing practices, the company has refocused on bringing in to-go customers. According to company executives, to-go orders have grown more than 40 percent in the past two years, now accounting for 10.5 percent of the chain’s total sales nationwide. Olive Garden also added large-order delivery to its restaurants to ramp up its catering business.
“We benefit significantly at Olive Garden because food travels so well, especially when we put it in bulk containers,” said Lee.
As fast food chains have rolled out deeply discounted menu deals, Olive Garden has followed suit with “everyday value” lunches and dinners priced between $6.99 and $9.99. The company says its trying to remain competitive in the increasingly crowded fast casual market.
Despite the viral success of the Never Ending Pasta Pass, Olive Garden execs say the key to the chain’s survival lies in keeping it simple, not playing around with gimmicks.
“One of the things we’re focused on now is trying to keep things simple,” Lee said. “Doing simple things every day is really hard. That’s what’s given us the biggest lift at Olive Garden. We’re not relying on promotional activity to drive business.”