Olive Garden is an American casual dining restaurant chain specializing in Italian-American cuisine. It is a subsidiary of Darden Restaurants, Inc., which is headquartered in unincorporated Orange County, Florida, near Orlando.[1] As of Jan 11, 2016, Olive Garden operates 844 locations globally and accounts for $3.8 billion of the $6.9 billion revenue of parent Darden
Olive Garden started as a unit of General Mills Inc. The first Olive Garden was opened on December 13, 1982, in Orlando. By 1989, there were 145 Olive Garden restaurants, making it the fastest-growing units in the General Mills restaurant division. Olive Garden restaurants were uniformly popular, and the chain's per-store sales soon matched former sister company Red Lobster. The company eventually became the largest chain of Italian-themed full-service restaurants in the United States.
General Mills spun off its restaurant holdings as Darden Restaurants (named for Red Lobster founder Bill Darden), a stand-alone company, in 1995. Olive Garden is Darden's most value oriented chain with an average 2009 check per person of $15.00 (USD) versus over $90 (USD) at its sibling Capital Grille.[3]
Brad Blum, a former president of Olive Garden, said that sales in existing restaurants sharply decreased, with a 12% decline occurring at one point, even though the company was quickly establishing new restaurants.[4] Sandra Pedicini of the Orlando Sentinel said that "Darden reinvented the Olive Garden in the 1990s, from a floundering chain into an industry star."[4]
As part of a February 2011 Darden analyst conference, the parent group announced it intended to add more than 200 Olive Garden locations in the following few years.[5] The announcement came after a previous announcement that the company would be expanding into potential new international markets for the chain, including the Middle East and Asia, due to the maturity of the North American market. The company also announced it would begin licensing franchising partnerships, a new direction for the chain and its parent which had traditionally relied on expansion via company owned locations exclusively.[6]
Parent company Darden also announced it was going to begin co-locating Olive Garden and sibling chain Red Lobster locations. The new format stores are designed for smaller market locations and will have separate entrances and dining areas but operate a single kitchen and support areas. The dining areas of the new format will be half the standard area found in more traditional Darden chains, but the actual building will be larger than stand alone operations of the chain. Menus will also remain separate, with customers only able to order from the location they are seated in.[7] In 2014, Darden Restaurants announced intentions to sell Red Lobster, therefore closing two Olive Garden and Red Lobster co-locations in Georgia and South Carolina, and converting the remaining four co-locations into stand-alone Olive Garden restaurants.
In 2010, Olive Garden generated $3.3 billion in sales. Its closest competitor, Carrabba's Italian Grill, had generated $650.5 million in sales during the same year. By 2012, sales had decreased at Olive Garden. At the final quarter of 2011, sales at established Olive Garden locations had decreased by 2.5%. Chris Muller, the dean of the hospitality school of Boston University and a former restaurant professor at the University of Florida, said "What does Olive Garden stand for now? I don't know what it stands for."[4] The Darden president and chief operating officer, said that Olive Garden at that point was "a beloved, but somewhat expected brand."[4] The company unveiled a three course meal for $12.95 offer in an effort to try to stop the decline.[8]
In 2011, Olive Garden implemented a mandatory tip-out program which enabled them to cut more employees' hourly wage to $2.13 an hour.[9] In October 2012, Olive Garden became one of the first national restaurant chains to test converting most of its staff to part-time, aiming to limit the cost of paying for health care benefits for full-time employees.[9]
On July 9, 2014, Olive Garden launched a new logo and restaurant design. This included the addition of online ordering and smaller lunch portions.
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