Same-store sales growth
In fiscal 2014, Darden Restaurants (DRI) had a systemwide same-store sales growth of 6.2%. The system comprises all the restaurants under the umbrella of Darden Restaurants. The chart below shows a four-year same-store sales growth trend for two restaurant brands under Darden.
Olive Garden’s same-store sales growth has a declining trend over the past four years, with fiscal 2014 coming in at -3.2%—the worst over the past four years. This declining trend also indicates that the promotional offers at Olive Garden, which we discussed earlier, were not as successful as anticipated. The average check during 2014 was in the range of $16.50—$17 at Olive Garden. Of this, 7% represented alcohol sales.
LongHorn Steakhouse’s same-store sales increased to 2.7% in 2014 year-over-year from 1.2% in 2013. However, this is lower compared to fiscal 2012 and fiscal 2011. In comparison, Texas Roadhouse (TXRH) had a same-store sales growth of 4.7% in 2014 from 3.4%. Plus, Outback Steakhouse, under the umbrella of Bloomin’ Brands (BLMN), had a same-store sales growth of 3.1%. The average check at LongHorn Steakhouse in 2014 was in the range of $19—$19.50. Of this, 9.5% was the share of alcohol sales.
Although pricing is generally considered the most important factor in attracting customers, that may not be the case when we look at Chipotle Mexican Grill (CMG). Chipotle Mexican Grill enjoyed double-digit same-store sales growth, with items priced higher than those of fast food restaurants McDonald’s (MCD) and Wendy’s (WEN). About 1% of Chipotle Mexican Grill is held by the Consumer Discretionary Select Sector SPDR ETF (XLY).