Throughout America, many casual-dining restaurant chains lost customers last year as inflation-fatigued consumers largely stuck to strict budgets. Olive Garden, however, continued to flourish.
According to Restaurant Business, the 42-year-old Italian chain, which has 908 U.S. locations, saw its systemwide sales increase by nearly 9% last year and surpass the $5 billion mark.
“Olive Garden provides a predictable experience at a reasonable price – in a time when you can’t always rely on that elsewhere. This will continue to fuel Olive Garden’s growth,” Kenny Rose, CEO of FranShares, told The Food Institute.
“Olive Garden has done a good job of catering to families of all generations,” said Gary Pryor, senior business consultant at Waters Business Consulting Group.
Italian cuisine’s relatively low production costs have helped Olive Garden sustain high profit margins, according to Spencer Michiel, a restaurant tech consultant at Back of House. Michiel added:
Olive Garden’s “menu simplicity and relaxed, casual service style make it possible to hire younger, less-skilled employees, keeping labor costs low.”
Here’s a look at the largest casual-dining chains’ domestic systemwide sales in 2023 according to recent Technomic data:
- Olive Garden – $5.1 billion (up 8.8%)
- Texas Roadhouse – $4.8 billion (up 13.8%)
- Applebee’s – $4.4 billion (down 0.1%)
- Chili’s – $4 billion (up 6.3%)
- Buffalo Wild Wings – $4 billion (up 0.5%)
Two noteworthy data points from Olive Garden’s closest pursuers, per Restaurant Business: Texas Roadhouse opened 24 locations last year while Applebee’s closed more than 30 locations in 2023 (but still boasts a robust 1,536 American units).
According to a new study by Vericast, consumers are eating out less. More than half of respondents (58%) said they’re eating out less frequently compared to 49% in 2023.
Per Vericast, 67% of consumers say that increased costs are making restaurants too expensive.
As a result, experts feel restaurant chains must focus on improving the customer experience.
“While the industry focuses on consistency – from how each guest is greeted to how each dish is prepared – it all starts with investing in teaching the ins and outs of each job to every staff member,” Katie Fairchild, the CMO at Restaurant365, told FI. “Doing so encourages a strong culture, (and) reduces turnover.”
Rose, meanwhile, said casual-dining chains must “take the first step to win customers’ loyalty, reward them, make them feel loved, and give them a reason to come back.”
The Food Institute Podcast’s “Foodservice Gamechangers” Series
Get to know the men and women behind the scenes of foodservice distribution in a new, limited series from The Food Institute Podcast called “Foodservice Gamechangers.” Recently, Pat Mulhern, advisor to The Food Institute, sat down for brief conversations with seven of the most influential foodservice merchandising and distribution leaders. Highlighting their food career journeys and management styles, the conversations feature insightful thoughts on what may lie ahead for manufacturers, distributors, and operators in foodservice.
