Your favorite steakhouse and pasta chains may eventually have to give in and increase menu prices—but currently, their parent company plans on avoiding this move for as long as possible.
Darden Restaurant Group, the company behind beloved brands LongHorn Steakhouse and Olive Garden, said it was seeing soaring sales at its dine-in chains, but noted it was feeling the industry-wide inflation pressures that have caused prices to increase at other restaurant chains this year.
Last week, Darden reported quarterly earnings and revenue that exceeded Wall Street estimates, its same-store sales surging 47.5%, according to FOX Business. Olive Garden, in particular, has seen a swift post-pandemic recovery, according to Darden CEO Gene Lee, who called the chain's recent performance "unbelievable."
However, the company predicts a 4% inflation for the current fiscal year due to the rising costs of commodities and labor. And while competitors ended up increasing their menu prices thanks to a similar rise in operational costs, Lee says that Darden doesn't plan on making that move at Olive Garden, Cheddar's, and other brands.
"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 said on an earnings call. "Because at some point, your average consumer could get priced out of casual dining if it costs too much."
Many chain restaurants have chosen to pass on their higher costs of operation to the customer by charging more for their food. Texas Roadhouse bumped its prices twice since early 2020 totaling a 2.8% increase, and experts say another increase may be coming this fall. Chipotle's prices grew by 4% in June, while Shake Shack increased the cost of their food and their delivery service in the last year.
Olive Garden's prices grew a modest 2.4% on a two-year basis, compared to the industry average of more than 5% during the same time period. And customers can expect a similar cautious attitude toward pricing to continue for the foreseeable future.
Another setback still plaguing Olive Garden on the road to full recovery? The everpresent shortage of staff. Most locations have sectioned off portions of their dining rooms which remain closed due to staffing limitations, executives said. This ends up translating to some six to eight fewer tables being served per location, said Lee. So while Olive Garden's pasta dinner prices may be staying put—its wait time for tables may be going up.
For more, check out:
And don't forget to sign up for our newsletter to get the latest restaurant news delivered straight to your inbox.