THE INDUSTRY

Casual dining’s current business climate is strong, with demand exceeding supply.

The current supply and demand dynamics in casual dining are excellent. Traffic growth has remained strong while unit growth has tempered, coming off the overheated levels of the mid-1990s. The result has been a healthy balance, with the strongest operators enjoying more traffic per unit.

Two factors enhance this favorable climate. In a tight labor market, only employers of choice will find the capable employees to successfully staff unit expansion. And rising interest rates and disappointing performances by venture restaurant companies in the 1990s make it challenging for all but the most successful companies to secure capital to fund expansion.

DARDEN

Red Lobster and Olive Garden are both outperforming the casual dining industry.

Red Lobster and Olive Garden have had same-restaurant sales growth for 10 and 23 quarters, respectively. By staying fresh and relevant to today’s consumers, each has outpaced the industry.

Much of this success stems from Darden’s reliance on constant consumer research. Capitalizing on this research and the fact that seafood has nearly universal appeal, Red Lobster differentiates itself from the competition by offering unique regional dishes; traffic-building promotions like its signature Lobsterfest; well-trained, highly motivated crew members; remodeled bar areas; and a lively, festive dining atmosphere.

Olive Garden has become a family of local restaurants providing a genuine Italian dining experience to guests. It serves approachable, fresh, high-quality Italian food, complemented by a great glass of wine, in revitalized restaurants and in new restaurants with the exciting, home-like Tuscan Farmhouse design.

Olive Garden also benefits from a unique partnership with Rocca delle Macie, one of Tuscany’s most respected family-owned wineries. Together they have established the Culinary Institute of Tuscany, where Olive Garden chefs share ideas with their Italian counterparts and create new authentic Italian dishes, while also experiencing a total immersion in Italian culture.

Darden’s consumer research guides the Company’s search for new concepts and appealing acquisitions. Bahama Breeze and Smokey Bones were created through this process.