Must-know: Darden’s promo strategies for its 2 big restaurants

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Nov. 20 2020, Updated 11:21 a.m. ET

Promotion at Olive Garden

Darden Restaurants (DRI) will run its Never Ending Pasta Bowl for $9.99 campaign as part of its Brand Renaissance program during the fall to boost sales at Olive Garden. Olive Garden launched the unlimited pasta campaign in September, selling 1,000 passes for $100. The pass enables a pass holder to enjoy unlimited pasta, breadsticks, and soda for 49 days, according to Fox News.

The company also remodeled three of its restaurants with new logos, menus, plateware, and signage. Let’s look at this, along with Darden’s unit growth and penetration.

Remodeling is another strategy that restaurant chains such as McDonald’s (MCD) and Burger King (BKW) are using to attract customers.

Promotion at LongHorn Steakhouse

The company ran two campaigns during the quarter—Grilled Tastes of Summer and Steaks Across America.

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  • The Grilled Tastes of Summer campaign offered entrées that are seasonally appropriate. The menu included items such as Fire-Grilled Hawaiian Ribeye, Grilled Lobster Chops, Grilled Shrimp, and Brown Butter Lemon Tilapia.
  • The Steaks Across America campaign offered Texas 3-Chili Pepper Ribeye, Kansas City BBQ Sirloin, and Manhattan stuffed Mushroom Filet starting at $12.99.

Despite these campaigns, the same-store sales were 2.8% compared to 3.2% year-over-year (or YoY).

To take advantage of several restaurants at once, you may want to consider the Vanguard Total Stock Market ETF (VTI), which holds Darden Restaurants and other restaurant chains such as Brinker International (EAT).

Improving efficiency

An increase in customer traffic through promotional campaigns put pressure on the operations at the restaurant and kitchen level. To mitigate this, the company stated that it has worked on staffing and scheduling and on improving the cooking processes, just as we saw in the Chipotle Mexican Grill (CMG) series.

The company also plans to outsource some of its production work so as not to affect its existing staff. Related to this, it’ll run tests in the next three to six months.

Let’s now look at Darden’s digital strategy and other initiatives.

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