These Common Dine-In Chains Will not Be Elevating Their Costs Proper Now, CEO Says

Your favourite steakhouse and pasta chains could ultimately have to offer in and increase menu prices—however at the moment, their father or mother firm plans on avoiding this transfer for so long as attainable.

Darden Restaurant Group, the corporate behind beloved manufacturers LongHorn Steakhouse and Olive Backyard, mentioned it was seeing soaring sales at its dine-in chains, however famous it was feeling the industry-wide inflation pressures which have induced costs to extend at different restaurant chains this yr.

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Final week, Darden reported quarterly earnings and income that exceeded Wall Avenue estimates, its same-store gross sales surging 47.5%, in keeping with FOX Business. Olive Backyard, particularly, has seen a swift post-pandemic restoration, in keeping with Darden CEO Gene Lee, who referred to as the chain’s recent performance “unbelievable.”

Nevertheless, the corporate predicts a 4% inflation for the present fiscal yr as a result of rising prices of commodities and labor. And whereas rivals ended up increasing their menu prices because of an analogous rise in operational prices, Lee says that Darden does not plan on making that transfer at Olive Backyard, Cheddar’s, and different manufacturers.

“We want to make sure this big group of consumers that we service feel as though they can still come to our restaurants and get an extremely great value for what they have to pay,” Lee mentioned on an earnings name. “Because at some point, your average consumer could get priced out of casual dining if it costs too much.”

Many chain eating places have chosen to go on their greater prices of operation to the shopper by charging extra for his or her meals. Texas Roadhouse bumped its costs twice since early 2020 totaling a 2.8% enhance, and consultants say another increase may be coming this fall. Chipotle’s costs grew by 4% in June, whereas Shake Shack increased the cost of their meals and their supply service within the final yr.

Olive Backyard’s costs grew a modest 2.4% on a two-year basis, in comparison with the {industry} common of greater than 5% throughout the identical time interval. And prospects can anticipate an analogous cautious angle towards pricing to proceed for the foreseeable future.

One other setback nonetheless plaguing Olive Backyard on the street to full restoration? The everpresent scarcity of workers. Most places have sectioned off parts of their eating rooms which stay closed as a result of staffing limitations, executives mentioned. This finally ends up translating to some six to eight fewer tables being served per location, mentioned Lee. So whereas Olive Backyard’s pasta dinner costs could also be staying put—its wait time for tables could also be going up.

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