Olive Garden’s parent company signs deal with Uber to revive pasta empire
Darden Restaurant Inc. shares rise after Olive Garden owner announces new delivery partnership with Uber Technologies Inc. said sales began to recover in August.
The restaurant operator plans to launch nationwide delivery for Olive Garden through a two-year partnership with Uber next May, according to a statement Thursday. A pilot program in a limited number of stores is planned for later this year.
The deal shows how Darden, which has previously resisted allowing widespread food delivery through third-party apps, is trying to appeal to cash-strapped consumers after seeing a “significant” drop in customer traffic in July.
Darden shares rose as much as 9% in New York, their biggest intraday gain since September 2021.
Darden CEO Rick Cardenas said on the company’s earnings call that business at Olive Garden picked up after the company extended its Never Ending Pasta Bowl promotion by four weeks, starting in late August instead of late September. Cardenas said all of Darden’s brands began to recover in August.
The recovery helped Darden maintain its full-year guidance, with first-quarter revenue of $2.76 billion coming in below analysts’ expectations, according to a statement Thursday.
The deal and the expansion of all-you-can-eat dining show the restaurant chain is trying to expand its reach in the face of spending cuts, especially among lower-income consumers worried about inflation and job security.
However, Cardenas said Darden won’t be getting into the “real deep discount game.” Rival Applebee’s, owned by Dine Brands Global Inc., ran a $1 margarita promotion along with its all-you-can-eat program this summer.
A tough July sent Darden’s sales down 1.1% in the first quarter compared to the same period last year, while Olive Garden’s sales fell 2.9%.
(Update details on promotions and partnerships with Uber)
