Starbucks made big news today announcing that it will be closing 600 stores and cut as many as 12,000 jobs. Most of the closings will be completed by next March.
While there isn't a direct correlation between Starbucks and Red Lobster, the same trends that affect one impact the other. It will be interesting to see how things shake out in the next 12-18 months. I'm not worried about Red Lobster and Olive Gardens overall, though there might be some cutting in our organizations as well. Red Lobster in particular will survive, they always do. My hopes/thoughts is that it will kill off some of the crappier chain restaurants and then when the economy is picking back up Darden will be poised to suck up some of that market share.
And with the news last week that Darden posted growth in the last quarter and overall in the last year on the backs of Olive Garden I think things will work well for our companies.
Triangle Biz Journal
Orlando, Fla.-based Darden (NYSE: DRI) posted net income of $101.8 million, or 71 cents per diluted share, on sales of $1.8 billion for the fourth quarter ended May 25. That compares with a net loss of $55.1 million, or a loss of 38 cents per share, on sales of $1.5 billion for the same period in 2007.and
Additionally, Olive Garden was the only chain to see a U.S. same-restaurant sales increase of 5.8 percent in the fourth quarter. Same-restaurant sales are a considered a key indicator of business health.
Red Lobster's same-restaurant sales declined 0.2 percent, LongHorn Steakhouse saw a 3.1 percent decline, The Capital Grille experienced a 3.8 percent drop, and Bahama Breeze saw a 3.7 percent decrease.
For the fiscal year:
- Olive Garden posted $3.07 billion in sales for a 10 percent increase over 2007 and a same-restaurant sales increase of 4.9 percent.
- Red Lobster reported $2.63 billion in sales for a 1 percent increase and same-restaurant sales increase of 1.1 percent.
- LongHorn Steakhouse saw $575 million in sales since Darden's acquisition for a 6.9 percent increase from the comparable period last year and same-restaurant sales decrease of 1.9 percent.
- The Capital Grille notched $170 million in sales since the acquisition and a 1.1 percent drop in same-restaurant sales.
- Bahama Breeze reported $135 million in total sales and same-restaurant sales decrease of 1.8 percent.