The parent of Olive Garden and seven other casual-dining chains is discontinuing dine-in service at all of its restaurants, including those in jurisdictions where table service is still permitted.
The company, Darden Restaurants, said the switch to takeout and delivery at 100% of its open restaurants will better protect employees and guests from contracting COVID-19. Any still-open dining room will shut down at the end of business Saturday.
Darden’s decision was communicated to the company’s 190,000-person workforce in a memo today from CEO Gene Lee. He acknowledged that completely forgoing dine-in service will likely reduce the hours of unit-level employees, but noted that a program created to maintain workers’ incomes will commence next week.
Lee told financial analysts yesterday that a branch of Olive Garden, Darden’s largest business, requires six to eight workers to provide takeout and delivery.
He also revealed at that time that Olive Garden had reversed its long-standing policy of delivering only orders of $75 or more. Lee said the chain is ramping up self-delivery to meet the off-premise demand. To-go sales are running about 20% over year-ago levels, he indicated.
Lee noted that Darden has been assured by its suppliers that restaurants offering takeout and delivery will have no trouble being resupplied.
“While we have taken extraordinary measures to keep our restaurants safe, after thoughtful conversations with my executive team, government leaders and many of you, I believe the best way we serve today is by focusing completely on providing our guests the comfort of knowing a home-cooked meal is just a call or click away,” Lee wrote.
In a companywide memo distributed yesterday, Lee acknowledged that the pandemic could put some Darden employees temporarily out of work. The company has $1 billion in cash on hand to help in weathering the crisis and keeping everyone paid, but the CEO said that may not be enough, given a projected burn rate of $40 million to $50 million if all restaurants have to completely suspend operations.
“My promise to you is that should this action need to be taken, it will be one of last resort, and only done to preserve Darden’s future,” Lee wrote in that communication.
He also revealed in the memo that he is forgoing his salary until the crisis passes.
Darden owns and operates 1,812 casual restaurants. In addition to Olive Garden, its brands include LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze and Eddie V’s.