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.
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.
In a conference call with analysts Thursday, the company also stressed that none of its full-time employees would be put on part-time status as a way to limit costs tied to new health care regulations. Darden noted a publicity backlash over its tests to use more part-timers hurt sales in the latest quarter.
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. Analysts predicted slightly higher earnings of 27 cents per share, according to FactSet.
At Olive Garden, executives noted that a “Dinner Today, Dinner Tomorrow” promotion didn’t clearly communicate the nature of the deal, which gave customers who ate at the restaurant a free second meal to take home.