Darden Restaurant’s shares are soaring, after a CEO of a association — which owns chains including Olive Garden and LongHorn Steakhouse — said that a infrequent dining industry’s destruction at a hands of millennials has been over-hyped.
“Millennials still wish to come to restaurants,” Gene Lee, Darden Restaurant’s CEO, pronounced in a call with investors on Tuesday. “I know we all don’t consider millennials go to infrequent dining restaurants, though 30% of all a guest are millennials.”
Millennials make adult roughly 24% of a sum US population, definition that these younger diners account for a disproportionately vast proportion of Darden Restaurants’ customers, something Lee says is due to chains’ ability to offer menu equipment that business are meddlesome in during a scold cost point.
Attracting younger business is profitable off for a company. Six out of 7 of Darden’s grill brands grew same-stores sales in a fourth quarter, with a difference being Seasons 52. The company’s dual biggest chains, Olive Garden and LongHorn Steakhouse, increasing same-stores sales by 4.4% and 3.5% in a quarter, respectively.
The company’s shares soared after stating fourth entertain gain on Tuesday, attack an all-time high of $95.22.
While Lee has tough information subsidy his claim that millennials are still visiting during slightest some infrequent dining chains, others in a attention are less assured about chains’ ability to appeal to younger customers.
Buffalo Wild Wings on Facebook
“Casual-dining restaurants face a singly severe marketplace today,” Buffalo Wild Wings CEO Sally Smith wrote in a minute to shareholders in late May.
According to Smith, who announced in Jun that she would step down as a company’s CEO after a months-long conflict with an romantic investor, these sit-down restaurants’ struggles can be blamed in partial on millennials.
“Millennial consumers are some-more captivated than their elders to cooking during home, grouping smoothness from restaurants, and eating quickly, in fast-casual or quick-serve restaurants,” Smith wrote.
Casual dining bondage have been acid for solutions, including adding some-more ethanol and budget-friendly options to menus, investing in new tech, and flourishing take-out sales. Some chains, like Fridays, that is rebranding as a “gastropub,” are perplexing to stretch themselves from a casual-dining attention all together.
“When we demeanour during a alternatives out there in a marketplace currently and who’s formulating hum and formulating excitement, it’s left divided from sequence infrequent dining,” John Antioco, a former CEO of TGI Fridays, told Business Insider.
However, according to Lee, infrequent dining bondage aren’t struggling since of millennials’ tastes — it’s since of their subpar execution.
The CEO says that Darden’s success is secure in simplifying business, adding peculiarity menu items, and boosting customer compensation rates. And, right now, Olive Garden and LongHorn Steakhouse have a total to back him up.