It's that time of the year again. Olive Garden parent Darden Restaurants (NYSE:DRI) is about to make tens of thousands of carb lovers happy, feeding them for the next few weeks for one flat price. Olive Garden's Never Ending Pasta Pass will go on sale at 2 p.m. EDT today, giving as many as 23,0000 buyers unlimited visits from Sept. 24 to Nov. 18 to enjoy the Never Ending Pasta Bowl promotion for $100.
Darden is raising the stakes this year, also offering 1,000 passes that will be good for 52 weeks for just $300 -- or less than $1 a day. It's not a bad deal for an Olive Garden regular, as the Never Ending Pasta Bowl retails for $10.99 for a single lunch of dinner serving. All pass sales will cease after 30 minutes.
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Olive Garden takes a fair share of ribbing for the promotion, but every year the passes sell out quickly. The new annual pass will likely go within seconds, giving the fastest fingers access to a year of unlimited pasta dishes along with the chain's signature salad and breadsticks.
This is the fifth year that Darden is running the promotion. The original plan was limited to just 1,000 buyers, and it included complimentary soft drinks. The free beverages have been discontinued since last year, but every year we're seeing Olive Garden increase the number of passes that it makes available. We're now up to 23,000 of the eight-week plans on sale, up from 22,000 in 2017. There may come a time when supply outstrips demand, but we haven't seen that yet.
The initiative may seem like a bad business move. The Never Ending Pasta Pass appeals primarily to folks bent on spending as much time as they can through the next eight weeks taking up a table that could've gone to someone willing to pay retail. It's a hall pass for gluttony, and folks buying them are going to go through a lot of sauced-up noodles in the coming weeks.
The promotion itself also doesn't really move the needle at Olive Garden. It stands to generate just $2.6 million from the pass sales, less than 0.03% of the total top-line results that Darden is expected to generate this year. Bulls will also argue that Darden doesn't need to do this. It's rolling just fine on its own. Olive Garden has come through with 15 consecutive quarters of positive comps. Darden closed out fiscal 2018 in fine fashion, clocking in with double-digit growth in total sales from continuing operations and adjusted earnings.
This is still a brilliant promotion, though. Darden generates plenty of free publicity for the annual offering. It wouldn't still be doing this if it weren't working. Olive Garden's focus through fiscal 2018 was simplification, trying to drum up repeat visits from its core customers instead of just shaking up the menu every so often. It's going to have 23,000 repeat customers on its hands in the coming weeks, and at least now it will cash in when they grow thirsty. Darden stock hit new all-time highs this week, so it looks like it's not just the new Never Ending Pasta Pass holders that will be seeing a lot of lettuce now.