Darden Restaurants Summer Update

Placer ,  September 21, 2021

When we last looked at the Darden Restaurant Group, year-over-two-years visits to Longhorn Steakhouse were up but many of the parent company’s other restaurants were struggling. With September almost behind us, we analyzed the data to see how the summer has treated some of the group’s best known dining brands.

August Tough for Dining Industry Nationwide

Although the restaurant industry appeared to be making a full visit recovery in early July, the year-over-two-year growth in visits was short-lived. By mid-August, rising COVID cases were already thwarting the budding dining recovery, with nationwide dining visits down -2.1%, -8.0%, -3.4%, and -6.1% for the weeks beginning August 16, August 23, August 30, and September 6, respectively. This provides some key context for Darden Restaurants’ summer performance indicating that visits should be viewed within the context of a general traffic downturn amid renewed pandemic concerns.

LongHorn Still Thriving, Olive Garden Still Catching Up

LongHorn Steakhouse and Olive Garden are by far Darden Restaurants’s biggest brands, with hundreds of locations each across the United States. But the pandemic recovery trajectories of the two leaders have been quite different.

LongHorn Steakhouse has been having an impressive spring and summer, with visits up 19.9%, 34.1%, and 17.1% in June, July, and August, respectively, when compared to the same months in 2019. Meanwhile, the Olive Garden, which had been gradually closing the visit gap and even reached year-over-two-year visit growth in July, dropped back down to a -5.3% visit gap in August.

Visit Growth for Darden’s Upscale Concepts

Longhorn’s success and Olive Garden’s difficulties could be partially attributed to consumers’ current preference for more upscale restaurants. Some patrons who have gone more than a year without stepping foot in a restaurant may be looking for a more celebratory dining experience. And, going out for steak may feel more festive than going out for pasta and pizza.

Looking at Darden’s more upscale concepts – Eddie V’s Prime Seafood, the Capital Grille, and Season 52 – gives added weight to this trend. All three brands saw major year-over-two-year visit growth in June and July and even remained visit-positive in August, despite the overall decline in dining visits due to rising concerns over the recent COVID surge. Indeed, after months of lockdowns and bans on indoor seating, going to the restaurant may still feel like a special event for many consumers – and they want their choice of restaurant to reflect that.

Darden’s Casual Concepts Struggle

The slowest recovering Darden brands are Yard House, a sports bar brand, and Cheddar’s Scratch Kitchen, which offers a variety of made-from-scratch pub and grille fare. While both brands have been consistently closing their visit gaps over the past couple of months, Yard House and Cheddar’s still saw -9.5% and -10.2% fewer visits, respectively, when comparing August 2021 to August 2019.

Visits to Bahama Breeze, on the other hand – also a casual dining chain – have been rising, with August visits up 4.2% when compared to 2019. But while Bahama Breeze’s prices place it squarely in a more casual sector, the brand markets itself as an “island getaway”, where one can “discover legendary cocktails and feel the energy of live music.” Perhaps Americans looking to do something special with friends and family after a long and challenging year feel more attracted to the Caribbean concept than to another pub or sports bar brand.

To learn more about the data behind this article and what Placer has to offer, visit https://www.placer.ai/.