WHILE CONSTRUCTION BIDS ARE STABILIZING, PERMITTING AND EQUIPMENT TIMELINES ARE STILL NOT WHERE THE COMPANY WANT THEM TO BE.
Two years ago during a call with investors, former Darden CEO Gene Lee lamented how COVID delays were harming unit growth. He hoped the company would soon reach the higher end of its 2-3 percent expansion
While Rick Cardenas is now chief executive, the central problem remains the same. The remnants of the pandemic, especially when it comes to permitting and equipment, are still impacting development. Cardenas said the goal is still to reach closer to 3 percent unit growth, but he admitted that it will take Darden “a little bit more time” than the company originally thought.
“It would be great if we could get permits as fast as we used to get them. It would be great if we can get utilities turned on as fast we used to get them,” Cardenas said during Darden’s Q4 earnings call. “That’s just not come back anywhere near where we need it to be.”
In fiscal 2023, the company opened a net of 47 restaurants, which equated to roughly 2.5 percent unit growth. Olive Garden opened a net of 21 corporate units, pushing it to 905 locations. The brand leader was followed by LongHorn Steakhouse (562 stores), Cheddar’s Scratch Kitchen (180 stores), Yard House (86 stores), The Capital Grille (62 stores), Seasons 52 (44 stores), Bahama Breeze (42 stores), Eddie V’s (29 stores), and The Capital Burger (four stores). All chains achieved net growth except for The Capital Grille and Bahama Breeze, which didn’t change their unit count, and Seasons 52, which dropped by one location.
Source: FSR Magazine