Canada Kicks Ass
Olive Garden hillariously ripped by Hedge Fund shareholder


BeaverFever @ Sat Sep 20, 2014 3:27 pm

I haven't been to an Olive Garden in more than 12 years but I always thought like most chain restaurants, it sucked. Apparently it can't even live up to that shitty standard.

A Hedge Fund's 294-Page Recipe for Fixing Olive Garden

By Justin Bachman September 12, 2014

Olive Garden doesn’t know how to cook pasta, soaks its salads in too much dressing, dumps sauce haphazardly atop its dishes, forgets to sell wine, and has strayed far from its Italian roots with dishes no one in Italy would touch. And that’s how the slumping restaurant chain is seen by people who dearly want to see it flourish.

Starboard Value, one of Darden Restaurants’ (DRI) largest shareholders, believes Olive Garden and its parent company can still turn things around under all-new management—and with dozens of highly specific changes to almost every aspect of how it runs restaurants. The activist hedge fund released a soup-to-nuts 294-page revival plan late Thursday, ahead of Darden’s latest earnings report. Total sales in the past quarter of $1.6 billion matched the company’s guidance; Olive Garden, its largest chain, saw yet another drop in same-store sales.

The gang at Starboard clearly enjoyed writing their manifesto for fixing Olive Garden, even though the firm’s stake in Darden has lost more than 12 percent of its value so far this year. The document addresses everything from use of corporate jets and limousine rides to the sizes of straws and chicken breasts. It also calls for the ouster of Darden’s entire 12-person board. All told, Starboard claims its reform program could boost earnings by as much as $326 million. Here are the highlights:

Story: Olive Garden's Redesign Bids Farewell to Fake Old-World Charm

Can I get a drink, please?
Darden’s alcohol sales severely lag its casual-dining competitors’, making up only 8 percent of sales while its peers soak up an average of 16.5 percent. Back in the 1990s and 2000s, Starboard notes, Darden and Olive Garden did a better job moving wine and notched about 13 percent of sales this way. “Wine is an integral part of the authentic Italian family dining experience. It appears that management has not focused or executed on the obvious alcohol opportunity.”

Enough with the breadsticks!
Olive Garden uses as many as 700 million breadsticks across the chain, averaging three per diner. Since most diners do not eat all three, the rest go into the trash, incurring “massive, unnecessary waste.” What’s more, according to Starboard gastronomes, the current offering is a refined flour product “with more air and less flavor (similar to hot dog buns).” Better breadstick management could save as much as $5 million per year.

The pasta is overcooked—and needs salt.
“If you Google ‘how to cook pasta,’ the first step of Pasta 101 is to salt the water.” Here’s the full rant on the topic:

Story: Olive Garden Pushes Smaller Portions and Online Ordering

"Shockingly, Olive Garden no longer salts the water it uses to boil the pasta, merely to get a longer warranty on its pots. This appalling decision shows just how little regard management has for delivering a quality experience to guests. We believe this results in a mushy, unappealing product that is well below competitors’ quality despite similar cost. How can management of the world’s largest Italian restaurant chain think it is okay to serve poorly prepared pasta?”


The “Cadillac” of take-home containers.
“Why do the to-go containers need to be dishwasher safe?” Starboard asks in a passage that compares Darden’s to-go boxes to Cadillacs. Overengineered packaging drives up costs by about $22 million each year, according to Starboard.

Give it a rest with all the Olive Garden TV commercials.
Darden advertises on national television 50 weeks per year, compared with only 39 weeks for its rivals, who tend to skip periods when potential customers aren’t watching much TV. Starboard says the company has also been slow to embrace social media and digital tools—where’s the Olive Garden app? “Rather than fixing its message and media mix, it appears that Darden has chosen the brute force method of throwing money at the problem using the blunt instrument of national TV ads.” To be fair, Darden executives did cite social media on Friday’s earnings call as an important tool to engage customers.

Story: Olive Garden, Darden's Slightly Sagging Star, Needs a Renaissance

What’s with the huge menus?
Red Lobster, another restaurant in the Darden empire, has 138 menu items; at rival seafood chains such as Bonefish Grill and Joe’s Crab Shack, the number is closer to 80. Darden’s LongHorn Steakhouse chain likewise offers 98 dishes while rivals Texas Roadhouse and Outback Steakhouse have 70 or fewer. The flagship, Olive Garden, has 26 more items than competitor Romano’s Macaroni Grill. This “menu complexity” increases the need for more employees, Starboard argues, and customers don’t care about all the extra choices.

Why bother with that new Olive Garden logo?
Changing all those signs will cost about $42 million, based on an estimate of $50,000 each to rebrand 837 restaurants. “Out of all the problems currently at Olive Garden, the last thing management should be focused on is Olive Garden’s logo,” Starboard says in a passage that dismisses the rebranding as a sign of “a loose spending policy.” The signage is “irrelevant at this moment” and won’t help the underlying business. (Not to mention design critics consider the new logo “inoffensive and charmless.”)

Slow-motion turnover at the tables.
Olive Garden takes as long as five minutes to clean and set a table for the next guest, compared with about one minute at what Starboard considers a successful casual-dining restaurant. The slower turns also lead to 60- to 90-minute waits for a table on Friday and Saturday nights. Starboard says a faster table turn could improve earnings by $6 million each year.

You people know nothing about wine.
Olive Garden isn’t pushing wine with its Italian-inspired entrees partially because the wait staff isn’t trained to understand vintages, taste, color, preferences, and how to serve wine. “Or, at the very least, taking a drink order.”

Darden executives who plow through the full, snark-filled prescription may also be ready for a drink. ... for-darden


Jabberwalker @ Sun Sep 21, 2014 5:16 pm

Olive Garden has long ago vanished from this part of the country.


raydan @ Sun Sep 21, 2014 5:33 pm

Jabberwalker Jabberwalker:
Olive Garden has long ago vanished from this part of the country.

There seems to be none in Québec, Ontario or the Maritimes. Winnipeg, Calgary, Edmonton and Langley are the only ones I could find.

Red Lobster also disappered from Québec years ago.


Jabberwalker @ Sun Sep 21, 2014 5:44 pm

... and here as well.


BeaverFever @ Sun Sep 21, 2014 6:56 pm

Theres a Red Lobster on Sheppard Ave E near warden. Also see them in the GTA burbs.


bootlegga @ Mon Sep 22, 2014 9:12 pm

Haven't eaten at either one in close to 20 years - I don't care for seafood (Red Lobster) and even with free bread and salad, $15 is steep for a plate of tasteless pasta.


martin14 @ Mon Sep 22, 2014 9:53 pm

BeaverFever BeaverFever:
[i]"Shockingly, Olive Garden no longer salts the water it uses to boil the pasta, merely to get a longer warranty on its pots.



PublicAnimalNo9 @ Mon Sep 22, 2014 10:48 pm

Romano’s Macaroni Grill???

Know why Italians don't BBQ? Because the pasta keeps slipping through the grill :mrgreen:


martin14 @ Mon Sep 22, 2014 11:25 pm

:lol: :lol:

I'll borrow that one... [B-o]


BartSimpson @ Tue Sep 23, 2014 1:19 pm

I never go to Olive Garden because they promise to treat me like family. No way I'm putting up with that crap!


Jabberwalker @ Tue Sep 23, 2014 3:42 pm

they promise to treat me like family.

Ya gotta kiss the Don's ring to get your linguine.



PublicAnimalNo9 @ Wed Sep 24, 2014 12:04 am

I actually did go to an Olive Garden, once. Was entirely unimpressed. Especially after growing up in a city full of Italians and Sicilians who actually knew how to make Italian food and run a restaurant.
Olive Garden is to Italian food as Mother's was to pizza.