Darden Restaurants Inc. Tuesday issued a gloomy outlook for its second quarter and fiscal year as the push to market the low prices at its Olive Garden chain failed to bring in as many customers as it had expected.
The casual-dining chain operator, which also owns Red Lobster and LongHorn Steakhouse, has struggled to garner momentum for Olive Garden, its largest chain with about 750 restaurants. Over the past year, Darden has emphasized Olive Garden’s food quality in its advertising, then switched back to the chain’s low prices. Neither strategy has worked for the chain, which has reported disappointing sales results for five straight quarters.
Olive Garden’s woes represent the difficulties facing the oversaturated casual-dining market, which generated $21.3 billion in total sales in the third quarter, according to research firm NPD Group.