The Darden Restaurant Group is one of the world's largest full-service restaurant groups. With eight restaurant chains in over 1,800 locations, the company owns and manages some of the biggest names in the dining industry.
When we last looked at Darden, visits were starting to pick up following a tough year of pandemic restrictions. Now, as grocery costs are rising, we checked back in to see how these restaurants are being impacted by the current economic environment.
Steak and Breadsticks Leading The Way
LongHorn Steakhouse and Olive Garden are the brand’s largest restaurants, with 546 LongHorn and 876 Olive Garden locations throughout the country as of May 2022.
LongHorn Steakhouse, which showed strong foot traffic throughout 2021, continued its strength into the new year. All months analyzed saw more visits in 2022 than in the equivalent months in 2019, with April and July showing particularly impressive year-over-three-year (Yo3Y) visit growth of 19.5% and 20.5%, respectively.
And while Olive Garden saw its foot traffic trailing behind 2019 levels, the chain still outperformed the overall restaurant industry. Earlier in the year, Yo3Y visits were down between 15.5% and 11.6%, but that gap narrowed to 4.3% in July 2022, compared to the nationwide decline of 8.8% for the full-service restaurant industry. August saw the brand outperforming the national average once again, proving the strength of this well-loved chain - even in a particularly difficult environment.
Casual Chains Catching Up
Darden’s smaller brands are also showing strength. Yard House, a sports bar and restaurant, draws customers in with its selection of over 100 beers on tap, while Seasons 52 offers a casual but elegant wine bar experience that focuses on seasonal menus. And Bahama Breeze provides laid-back Caribbean-style cooking and live music.
These three chains saw lowered Yo3Y visits in the beginning of the year, as COVID kept many at home, but successfully closed this gap before outpacing Yo3Y foot traffic by April. And although visits to Seasons 52 and Bahama Breeze dipped below 2019 numbers again in May and June – likely due to the ongoing inflation and tightening budgets – both brands swiftly narrowed their visit gaps once more. By July, Seasons 52 and Bahama Breeze were once again seeing Yo3Y increases of 2.1% and 1.5%, respectively. Yard House, meanwhile, saw its foot traffic elevated for all months analyzed aside from January and August, with July Yo3Y foot traffic up 3.6%. And while August saw a slight downturn in visits to these chains, Yo3Y monthly visits to all three brands remained well above the nationwide average for the month.
As inflation slows, and as gas prices level out, many customers are once again excited to dine out. These restaurants all boast affordable price points and have kept their costs well below inflation rates, which is likely to continue drawing diners in despite the wider restaurant downturn.
Higher-End on the Rise
Eddie V’s Prime Seafood and The Capital Grille are Darden’s fine dining restaurants – both of which expanded in recent years. Eddie V’s restaurant fleet increased 45% between May 2018 and May 2022, while The Capital Grille’s restaurant fleet increased from 57 to 62 locations in the same period. The additional locations have boosted overall visits and diners have already begun filling the new venues. And while visits per venue are still trailing behind 2019 numbers, overall visits were elevated, showing that these restaurants can still attract customers to their locations.
This expansion will likely continue to pay off over the next few years as the economic climate stabilizes and consumers look for fine dining options.
Final Bites
Darden’s portfolio offers something for every kind of customer. The company implemented strategic expansion plans and has successfully managed the effects of both COVID and inflation, as shown by its portfolio’s overperformance compared to the wider restaurant sector.
Will Darden Restaurant Group continue to thrive as 2022 winds down?
Visit placer.ai/blog to find out.
