CEO of Olive Garden’s parent company says fast-food inflation is pushing customers to sit at franchises
CABIA President Tom Manzo joined “Fox & Friends” to discuss the impact of the minimum wage increase on the fast food industry as thousands are forced to lose their job.
Sit-down prices at fast-food chains are causing some customers to avoid the drive-thru in favor of a true casual dining experience, according to Rick Cardenas, CEO of Darden Restaurants.
Cardenas said Darden, which owns popular franchises such as Olive Garden and Longhorn Steakhouse, has yet to benefit from this trend, but noted that competitors like Brinker International, owner of Chili’s, and Applebee’s parent company , Dine Brands, began catering to fast food customers with cheap deals. .
During Darden’s quarterly earnings call Thursday, Cardenas said industry data showed “a slight shift” from fast-food establishments toward sit-down competitors.
| Teleprinter | Security | Last | Change | Change % |
|---|---|---|---|---|
| DRI | DARDEN RESTAURANT INC. | 153.26 | -1.03 | -0.67% |
| EAT | BRINKER INTERNATIONAL INC. | 71.26 | -0.15 | -0.21% |
| DIN | DINE BRANDS GLOBAL INC. | 38.02 | -0.51 | -1.32% |
OLIVE GARDEN INCREASES MENU PRICES AGAIN
Customers enter an Olive Garden restaurant in Pittsburg, California, United States, Friday, December 9, 2022. (David Paul Morris/Bloomberg via Getty Images / Getty Images)
“The consumer is really paying attention to the price they pay everywhere, not just in restaurants,” Cardenas said.
His comments follow a recent investigation powered by LendingTree found that 78% of consumers now view fast food as a “luxury” purchase based on high prices.
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Restaurant chains like Applebee’s are increasingly offering deals to lure customers away from high-priced fast food restaurants. (Scott Olson/Getty Images/Getty Images)
Half of those surveyed said they view fast food as a luxury due to financial difficulties. This is especially true among Americans who earn less than $30,000 per year (71%), parents of young children (58%), and Generation Z (58%).
Financial pressure means fewer people are visiting the drive-thru. The results show that three in four Americans typically eat fast food once a week, but 62 percent of those surveyed said they eat it less frequently due to cost.
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Chili’s introduced the Big Smasher Burger, featuring diced red onions, lettuce, pickles, Thousand Island dressing, American cheese and a nearly half-pound hand-smashed hamburger patty , all for just $10.99. (Chili’s Grill & Bar)
Some franchises reacted by offering temporary offers. McDonald’s added a $5 menu value in June, and Wendy’s launched a $3 breakfast deal, both for a limited time.
Restaurants offering casual dining have come up with their own innovations to take a bite out of the consumer base dissatisfied with fast food. Chili’s recently introduced a Big Mac-inspired “Big Smasher” burger that has twice the meat at just $10.99 when included in a value meal, about $1 more than going to McDonald’s .
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Applebee’s has separately launched various meal deals specifically aimed at competing with fast-food chains, Dine Brands CEO John Peyton told CNBC in May.
Breck Dumas of FOX Business contributed to this report.
News Source : www.foxbusiness.com
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