It was nearly eight years ago that Darden’s previous CEO, Gene Lee, implemented what came to be known as the “Back-to-Basics” business strategy. Ever since then, the country’s largest casual dining group has used it to not only beat their competition, but more importantly, make their customers and employees happy. The approach centers around a foundation of food, service, and atmosphere. By simplifying the menu, the cooks have less weight on their backs, while the servers have less to remember. Staff members become more knowledgeable, both front and back of the house, because they end up making or serving fewer items more often, thus leading to higher quality food. Service is heightened by a focus on server training coupled with the smaller menu, and the atmosphere is kept simple and inviting. No gimmicks, no promotional pricing, or heavy marketing, just good food, friendly greetings, and a comfortable setting.
This is the strategy that Darden’s current CEO, Rick Cardenas, has reimplemented to great success. It was just this past month that the company hit $10 billion in sales for the first time in its history. Total sales were up 9.4% in the last quarter ending November 27, 2022. Consolidated store sales were up 7.3%. Business was so rosy by the end of that second quarter, the company saw fit to increase its 2023 fiscal outlook. Total sales are now expected to reach $10.3 to $10.45 billion, with same-restaurant sales to improve by 5% to 6.5%, and they now expect to open 55-60 new restaurants.
Of course, in the hospitality business, it is never just about the money. Guest satisfaction and loyalty are just as important. Back-to-Basics works to improve that, as well. In fact, customer satisfaction for four of its ten brands is at an all-time high, while the six others are near historic highs. Capping that off is the pride gleaned from a recent Technomic report that had a Darden brand ranked first among major casual dining brands in each measurement category.
This was helped greatly by the return of an Olive Garden guest favorite, the Never-Ending Pasta Bowl. Run for seven weeks within the second quarter, it was the first time customers had seen the special in three years. It had even been conjectured on a recent earnings call that it was the main driver of Olive Garden’s 7.6% sales increase. However, conjecture is not needed to when discussing the pasta special’s effect on customer satisfaction. Nor is the glut in pasta sales lost upon the cooks; it fit perfectly with the Back-to-Basics tenet of being simple to execute.
Darden is a tremendously well-run company, a position enjoyed due to the amount of money they invest in their people and their guests. It was nearly eight years ago that management posited that such a focus would surely lead to better business and sales, and of course, here in the future, we now see that such an outcome is indeed made manifest. Treat employees with respect, support them through an historic lockdown, and make training and fulfillment a top priority, and it will trickle down to the customer. It’s a simple equation that has paid off in spades.