Olive Garden owner tees up strong holiday rush as consumers dine out
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The holidays have become a critical time for restaurants — and conditions are ripe for a strong showing this year.
Why it matters: With gas prices at a 2023 low, the stock market rising and consumer sentiment improving, restaurants are hoping for a merry holiday season, after recently struggling with inflation.
Driving the news: Darden Restaurants — which owns Olive Garden, LongHorn Steakhouse and Cheddar's Scratch Kitchen, among other brands — said Friday that it's seeing signs of healthy holiday sales.
- "We are encouraged by the strong holiday bookings we are seeing," CEO Ricardo Cardenas told investors on an earnings call.
Zoom in: If Thanksgiving was any indication, Americans are ready for someone else to do the cooking for them this year.
- Darden's Capital Grille, Ruth's Chris Steak House, Eddie V's and Seasons 52 each recorded record sales on Thanksgiving Day, the company said.
Context: In November, U.S. food service sales rose over 11%, compared with a year earlier, according to retail data released Thursday.
- Consumers who sought savings by eating at home appear to have decided enough was enough: "Volumes sold at grocery stores fell on the year, while volumes of purchases at restaurants, bars, and coffee shops rose," Comerica Bank chief econonist Bill Adams noted.
Yes, but: Darden's same-restaurant sales were up only 2.8% in the most recent period, compared with a year earlier.
- And Darden did experience "some softness" at its fine dining establishments in the latest quarter, Cardenas said.
- But the company still beat analyst estimates on earnings and raised its outlook for 2024.
The bottom line: Expect bustling dining rooms when you're eating out during the holiday rush.
