In Darden Restaurants' (NYSE:DRI) latest quarter, its Olive Garden brand underperformed substantially. Sales are weak and the company is finding it difficult to bring customers through the door.
Part of this is due to the tepidity in consumer spending habits, but it's probably a lot more to do with Olive Garden's aged image. In a recent marketing maneuver and effort to bring in untapped markets, the Italian chain restaurant is now offering a burger. We've all been told, on several occasions, to not order that one item on the menu that is a clear aberration from a restaurant's forte. Is this the kind of "refresh" we can expect from Darden's Olive Garden?
Soup, salad, breadsticks, cheeseburgers
Admittedly, the author has not stepped foot in the classic Italian cuisine purveyor that is Olive Garden for many years. But the last time that did occur, it was glorious. Inexpensive and endless minestrone with parmesan-laced salad, coupled with more breadsticks than Pepperidge Farm could ever dream of -- it was a killer combination for less than $8. Above the $10 range, a chicken parmesan entrée was the meal of choice for so many anniversaries and end-of-season soccer soirees. Olive Garden had a great formula for the '90s, but everyone is aware that it needs a new "thing."
Enter: Italian Burger.
Italian food, whether it's cheap and American-ized, or real, is just so good. The detailed and rich cuisine goes in so many directions and can appeal to almost any eater. One thing firmly outside of the Italian realm is a burger. But Darden, watching so many other chains offering absurd burger combinations, couldn't resist.
The Italiano Burger -- Italiano is Italian for Italian -- includes Italian prosciutto (thinly sliced floppy bacon), mozzarella cheese, arugula (it's like lettuce!), and a garlic aioli spread. Aioli, for America purposes, is garlic mayonnaise. So this bacon cheeseburger is covered in garlic-y garlic mayonnaise. It comes with a side of parmesan french fries, which obviously must be delicious.
Now, besides the fact that this burger sounds pretty tasty (Business Insider says it's not), it's broadcasting a troubling message from Darden HQ to consumers. The message reads something like this: "You guys like burgers, right? Because we ran out of Italian food ideas, and Google isn't working." One can assume that if the burger doesn't work out, Olive Garden will begin to sell pasta fajole smoothies and fettuccine alfredo sushi.
There are rules
A golden rule of retailing, unless you were Steve Jobs, is that you can't dictate to the consumer. No one has ever walked into Olive Garden hoping they sell burgers. People go to Olive Garden exclusively for Italian-inspired dishes and copious, copious amounts of parmesan. To sell a burger at this restaurant is to ask you, the customer, to forget everything you knew about Olive Garden -- even the times you went there to celebrate your kid's Little League almost-victory.
Realistically, this burger will not affect the income statement or future earnings. It's made from stuff they already have back there in that Tuscan-inspired kitchen. But management needs to think a little harder about what it means to reinvent the Olive Garden brand.