Darden Does It Right
Forbes recently named its 15 Best Chain Restaurants based on quality, taste, speed of service, friendliness of service, cleanliness, overall value, atmosphere, child-friendliness, healthy choices availability, and green/sustainable practices. Included in the top 10 on this elite list are Olive Garden (#3), Red Lobster (#6), and LongHorn Steakhouse (#10), all part of the Darden Restaurants Inc. (DRI) empire. Darden also recently earned recognition from FORTUNE magazine as one of its “100 Best Companies to Work For.”
So what’s Darden’s secret for making and keeping its 180,000 employees and millions of customers happy, and are there lessons to be learned by its many competitors?
The FORTUNErecognition derived primarily from the company offering health insurance to its part-time workers but also from survey responses from randomly selected company employees. Darden has also become one of the leaders in the foodservice industry in its “green” initiatives. Its new corporate headquarters in Orlando is certified LEED Gold for its design and environmentally smart features that will save 1.8 million gallons of water and use 16% less energy. DRI’s Generation Commitment (www.generationcommitment.com) provides in-depth information on the company’s continuing efforts to be a responsible corporate citizen.
As for customers, Darden seems to have tapped into a strategy that keeps the brands fresh and relevant, even after more than 30 years. At the corporate level, the company considers location to be a critical factor in determining a restaurant’s long-term success and devotes significant effort to the site-selection process. Prior to entering a market, it conducts a thorough study to determine the optimal number and placement of restaurants. The site selection process incorporates a variety of analytical techniques to evaluate key factors, including trade area demographics (such as target population density and household income levels); competitive influences in the trade area; the site’s visibility, accessibility and traffic volume; and proximity to activity centers such as shopping malls, hotel/motel complexes, offices and universities. Then members of senior management evaluate, inspect, and approve each restaurant site prior to its acquisition.
The performance of each restaurant is systematically reviewed to ensure that each one meets corporate expectations. When a restaurant falls below minimum standards, a thorough analysis is conducted to determine the causes, and marketing and operational plans are implemented to improve that restaurant’s performance. If performance does not improve to acceptable levels, the restaurant is evaluated for relocation, closing, or conversion to one of the other DRI brands.
Darden has also invested heavily in technology. It implemented technology-enabled business solutions targeted at improved financial control, cost management, enhanced guest service, and improved employee effectiveness. Over the past few years, DRI implemented a new meal-pacing system in all Olive Garden and Red Lobster locations, designed to properly pace the preparation of menu items, based on cook time, to enhance the guest’s experience and enhance restaurant capacity by increasing table turns. During fiscal 2012, Bahama Breeze, LongHorn Steakhouse, The Capital Grille and Seasons 52 will pilot and begin implementing this meal-pacing system in their locations.
During fiscal 2011, Olive Garden implemented a new table-management system to improve the guest experience by providing accurate wait times and enhance restaurant capacity by increasing table turns. During fiscal 2012, LongHorn Steakhouse will pilot and begin implementing the table-management system in its locations. In addition, during fiscal 2011 DRI continued to work on transformational initiatives to effectively manage its large work force and to manage costs. During fiscal 2012, a talent acquisition system is being piloted and implemented across all brands for front line employee candidates.
At the concept level, Olive Garden has grown to become the nation’s leading restaurant in the Italian-dining segment. The Italian focus led to the establishment of Olive Garden’s Culinary Institute of Tuscany in 1999. More than 1,200 Olive Garden managers and team members have been welcomed to the CIT as part of an internal cultural immersion program designed to inspire, motivate, and educate team members. This coming year, Olive Garden will begin remodeling more than 400 older restaurants to be consistent with the Tuscan Farmhouse design of the restaurants opened during the past six years. On the menu, the all-you-can-eat soup, salad, and breadsticks brings in the crowds at lunch time, and the value-priced offerings such as the Never Ending Pasta Bowl with unlimited salad and breadsticks keep the crowds coming back.
The Red Lobster brand is also experiencing a systemwide makeover, with 700 restaurants slated for renovation to the new Bar Harbor design, an effort to create a warm and inviting seaside atmosphere. The restaurants installed wood-burning grills several years ago, and many of the menu options now feature this method of preparation and cooked by designated Grillmasters. The company has also launched a new national “Sea Food Differently” marketing campaign. And of course, the limited time offers such as Endless Shrimp and Lobster Fest are big draws for seafood lovers.
Aside from the implementation of the menu-pacing and table-management systems, no significant planned changes or renovations have been reported for LongHorn Steakhouse. Even after three decades in business, the signature steak menu continues to appeal to its fans (steakhouse chains Texas Roadhouse and Outback Steakhouse also made the Top 10 list). DRI considers LongHorn to be a major growth vehicle for the corporation and plans to expand new units at the rate of 10% annually.
Darden Restaurants Inc. is just one of thousands of companies profiled in Chain Store Guide’s database of Chain Restaurant Operators. For a free demonstration of the power of our data, please contact Chain Store Guide at 1-800-778-9794.
Linda Helman, Senior Editor
Linda has worked at Chain Store Guide for twelve years. Prior to that, Linda worked as a research economist for the federal government, as an analyst for a management consulting firm and as a freelance writer. Please contact her if you have questions or comments.