This company has cornered not one but two dining markets: seafood and "Hospitaliano." Darden Restaurants is the #1 casual-dining operator (in terms of revenue), with about 1,900 restaurants in the US and Canada. Its flagship chains include seafood-segment leader Red Lobster and top Italian-themed concept Olive Garden. Both chains cater to families by offering mid-priced menu items, themed interiors, and primarily suburban locations. Darden also operates the LongHorn Steakhouse chain, with about 370 outlets. Other dining concepts include The Capital Grille (upscale steakhouse), Bahama Breeze (Caribbean food and drinks), and Seasons 52 (casual grill and wine bar).
Being at the forefront of the casual dining industry, Darden's flagship brands have come to epitomize the chain restaurant experience. Both Red Lobster (about 675 locations) and Olive Garden (roughly 750 locations) dominate the landscape of suburban America.
Red Lobster and Olive Garden offer a version of seafood and Italian cuisine designed for mass appeal and affordability. Darden spends heavily on research and development in order to roll out a succession of new menu items that are heavily promoted through television advertising. The chains also utilize discount pricing and special offers to win business against the competition, including Applebee's, Chili's (operated by Brinker International), and Outback Steakhouse (OSI Restaurant Partners).
Darden has built its dining empire without the aid of franchising, a strategy that allows the company the highest degree of control for maintaining food and service quality. The major downside is the cost of operating and maintaining all those restaurants. The company is constantly focused on improving margins by negotiating lower prices for food and other ingredients and by adjusting its workforce to reduce labor costs.
The recession of recent years has posed serious challenges for most casual dining operators, but Darden's chains fared better than some of the company's competitors thanks to intense customer loyalty. The company did restructure its corporate office in mid-2012, eliminating about 40 positions in departments such as finance, human resources, supply chain, and building services.
Darden is looking outside of the US for growth, including plans to develop Olive Garden and LongHorn Steakhouse locations in Puerto Rico. A Red Lobster opened in Dubai in July 2011. Most of the company's international growth emphasis has been on its Olive Garden and LongHorn Steakhouse chains. However, Darden has been remodeling many of its domestic Olive Garden and LongHorn Steakhouse units in lieu of adding new locations. – less
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