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Folks looking for evidence of a casual-dining resurrection received more evidence with the strong performance of Darden Restaurants, whose dual flagship chains Olive Garden and LongHorn Steakhouse both reported strong early-year sales.
LongHorn in particular has been consistent. Its same-store sales rose 7.2%, the 19th straight increase, a streak that matches Texas Roadhouse and Chili’s. What’s more, LongHorn has outperformed Texas Roadhouse in three of the past four periods.
As my colleague Joe Guszkowski reported, LongHorn’s sales were the result of the company’s efforts to improve the business and its food. The brand kept price hikes to a minimum, despite higher beef costs.
Still, that both have thrived despite a full-service restaurant market that has otherwise remained uncertain remains impressive. And it demonstrates that steak is one of the restaurant industry’s biggest no-brainers.
As long as the restaurants are operated well and look good, customers have demonstrated a willingness to buy a good steak in all but the worst of economies. It may be more expensive, but for many Americans, few things are as celebratory as a high-quality cut of NY Strip.
This week’s financial news
Andy Wiederhorn is out as the CEO of Fat Brands and so are his kids and much of the board. That was a necessity for the company to get financing through bankruptcy so it can be sold. I need a break from writing about Fat Brands.
Chicken sales at Taco Bell are up 50% over the past two years. Yeah I’d introduce more chicken products, too.
The owner of Pizza Inn is done with Uber Eats, which just raised prices. Third-party delivery really has changed the economics of restaurants and I would not be surprised to see more of these kinds of decisions, even if this one is coming from a relatively small company.
You should read Guszkowski’s story on the impact of fake news on restaurants. Pay close attention to social media, and to AI-generated reports, and push back hard and early. Because it can all get out of hand fast.
Number of the week
We looked at the performance of Fat Brands restaurant chains since 2019. The company is basically Twin Peaks, some decent brands and a bunch of question marks.
Quote of the week
“The debtors are at a critical juncture in these Chapter 11 cases.” -John DiDonato, chief restructuring officer for Fat Brands, in explaining the company’s deal that removes Andy Wiederhorn as its CEO.
On the blog
I wrote a lot about Fat Brands this week. I also examined the emergence of $3 menus at major fast-food brands. Check out all my blog posts on The Bottom Line.
On the podcasts
You’re not going to believe this but A Deeper Dive this week was about Fat Brands. On The Week in Restaurants we also talked about Fat Brands but also other stuff like Darden Restaurants and fake news.
For questions, comments or story ideas, send me an email at jonathan.maze@informa.com. And follow me on Twitter at @jonathanmaze. And also LinkedIn. And TikTok.