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Olive Garden owner shifts course

Dec. 21, 2012 @ 12:00 AM

NEW YORK -- After new ad campaigns touting the quality of its food failed to spark sales, the parent company of Olive Garden and Red Lobster is retooling its strategy to attract diners with more promotional deals.

The shift comes after Darden Restaurants Inc. earlier this fall moved to update the image of its flagship chains and appeal to younger diners in their 20s and 30s, who increasingly prize fresh, high-quality ingredients. The problem is that many of those same diners also want cheaper prices and convenience.

In addition to those shifting tastes, Darden and other casual dining chains such as Applebee's are dealing with customers who are being more careful about where and how often they eat out in the weak economy.

To address the "affordability many guests need right now," Darden plans to dial back on its efforts to revamp the image of its chains for now and increase the frequency of promotions that underscore value, said Drew Madsen, the company's chief operating officer.

The remarks came in a conference call with analysts to discuss Darden's fiscal second-quarter results, which showed a 37 percent drop in net income. For the three months ended Nov. 25, the company said it earned $33.6 million, or 26 cents per share. That's compared with $53.7 million, or 40 cents per share, a year ago.

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