. Olive Garden to Raise Prices Again After Sales Decline. Olive Garden to Raise Prices Again After Sales Decline Olive Garden has announced plans to raise prices further after a decline in sales last quarter. According to the CEO, the company is not offering discounts to attract customers despite declining sales and customer losses. The company attributes the revenue decline to inflation’s financial impact, which is affecting certain customers more severely than others. Olive Garden’s parent company, Darden Restaurants, stated that prices will increase by an average of 2% to 3% over the next year across all restaurants. Olive Garden’s menu prices increased by 1% last year. The increase in menu prices has been lower than inflation in recent years, according to the company. Darden anticipates revenue growth of 1% to 2% through 2025 with this plan. Restaurant prices, including those of local eateries, major chains, and fast food establishments, have risen significantly to keep pace with rising operational costs. To address customer concerns about rising prices, many chains have begun offering discounted promotions. McDonald’s introduced a $5 meal deal to counteract rising prices. Wendy’s and Starbucks have joined the trend by offering value meals, with Wendy’s offering a $3 breakfast and Starbucks offering a $6 breakfast sandwich and coffee combination.
(WJET/WFXP) — Olive Garden announced it will continue to raise prices after a sales decline last quarter.
The CEO stated that the company is still not offering discounts to attract customers, despite a decline in sales and customer losses. During the company’s earnings call on Thursday, executives attributed the revenue decline to the financial stress of inflation, which is hitting some customers more than others.
“The decline is primarily at household income below the median … our other (customer) groups are stable or growing,” said Raj Vennam, chief financial officer of Olive Garden parent Darden Restaurants.
Darden Restaurants, which also owns and operates restaurants such as Longhorn Steakhouse and Cheddar’s Scratch Kitchen, said it will increase prices companywide by an average of 2% to 3% over the next year.
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Olive Garden already saw a 1% increase in menu prices last year. Vennam pointed out that Olive Garden’s menu price increases have been lower than inflation in recent years.
Darden expects to see 1% to 2% revenue growth through 2025 with this plan, the company said during a recent earnings presentation.
Prices at restaurants – from local restaurants to major chains and fast food franchises – have risen significantly in recent years to keep pace with the rising cost of doing business.
As rising prices turn off some customers, many chains have started offering discount deals in an effort to draw people back. McDonald’s recently announced a new $5 meal deal to address concerns about rising prices.
Wendy’s and Starbucks also joined in offering value meals. Wendy’s offers a $3 breakfast and Starbucks offers a $6 breakfast sandwich and coffee combo.
