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The Darden-est Things

by 
Ezra Carmel
 on 
June 19, 2023
The Darden-est Things

Persistent inflation has left many industry analysts wary of dining sector foot traffic performance in 2023. Yet, there are quite a few dining formats and shining stars that leave plenty of room for optimism. We dove into the location intelligence metrics for Olive Garden and LongHorn Steakhouse – two of Darden Restaurants’ largest brands – to take a closer look at how full-service chains are cooking up visits in a challenging economic climate. 

Affordable Full-Service

Though consumers may be taking a more frugal approach to dining in the current inflationary environment, Olive Garden and Longhorn Steakhouse are driving visits despite shrinking budgets. This success may be due to consumers’ perception of the chains as “an affordable luxury”, according to Darden CEO Rick Cardenas. So while many consumers are feeling the pinch of inflation, they are still indulging in full-service restaurants. 

For the majority of months since January 2022, both Olive Garden and LongHorn Steakhouse experienced baseline visit growth. In May 2023, visits to Olive Garden and LongHorn Steakhouse were 4.0% and 5.5% higher, respectively, than in January 2022. The month with the largest visit spike was December 2022 when many consumers were on vacation and had time to dine out with family and friends. 

Darden’s President and C.E.O, Chris Cardenas, has also emphasized the company’s investments in online ordering and pick-up, which help customers take orders home without paying the additional expenses charged by third-party delivery platforms. The company’s relative disregard for delivery may also be a statement about how Olive Garden and LongHorn Steakhouse prioritize the social, dine-in experience – a recipe that has been successful for other casual dining and “eatertainment” brands.

Family Affairs

Zooming in on recent visit trends shows that in addition to holiday growth, Olive Garden and LongHorn Steakhouse are able to drive visits during other significant retail moments. In Q1 2023, the brands experienced year-over-year (YoY) quarterly visit growth despite the persistent inflation straining diners’ budgets.  

And Mother’s Day 2023, on May 14th, also seems to have driven a large visit spike, although the performance may have been helped by calendar differences – last year’s Mother’s Day fell on the equivalent of the previous week in 2022. Still, the significant YoY increase in weekly visits over the week of May 8-14 2023 indicates that consumers were eager to celebrate their moms at Olive Garden and LongHorn Steakhouse. This data also suggests that Father’s Day on June 18th, 2023 could have a similar capacity to drive visits. 

Garden Grows and LongHorn Bullish

Whether it’s to celebrate family or indulge without breaking the bank, LongHorn Steakhouse and Olive Garden’s popularity is driving the continued expansion of the respective chains in multiple states. Darden Restaurants plans to open approximately 55 new restaurants in fiscal years 2023 and 2024, with the majority expected to be Olive Garden and LongHorn Steakhouse venues. 

The most Olive Garden locations are in Texas, Florida, and California – but the chain seems particularly beloved in the Golden State, where a recent survey named it the state’s most loved brand. And analyzing YoY visits per venue for Q1 2023 appears to substantiate Olive Garden’s popularity in California – the state’s 9.0% YoY visits per venue growth greatly outperformed the nationwide average for the chain (2.8%). California also has one of Olive Garden’s largest consumer-to-venue ratios – with approximately 500,000 residents per restaurant – indicating that the chain still has plenty of room to grow in the Golden State. 

LongHorn Steakhouse’s biggest markets by number of locations include Florida, Georgia, and Texas. However, all of these markets underperformed the chain’s nationwide visits per venue average (2.0%). This is likely in part due to LongHorn Steakhouse’s ongoing expansion and the diminishing marginal returns of new locations in regions with the most restaurants. But in areas with fewer restaurants, new venues attract fresh visits as diners get to know the chain. With the current rate of inflation for food away from home, Longhorn Steakhouse’s reputation as a good value for money may help the chain make a positive first impression.

Filling Up on Full-Service

Persistent inflation has raised concerns about the performance of the dining sector, but there are positive indicators for a number of brands including full-service chains. Known for their value for money, Olive Garden and LongHorn Steakhouse have been able to drive visits despite consumers tightening their belts. The brands’ recent visit growth is a sign that they will continue to find success as they expand throughout the country. 

For updates and more data-driven foot traffic insights, visit Placer.ai.

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