Olive Garden tests smaller portions amid rising affordability concerns

In an effort to adapt to changing customer preferences in the casual dining sector, Darden Restaurants, based in Orlando, Florida, has launched an experiment at Olive Garden, targeting approximately 40% of its locations across the United States. This move comes in response to increasing price sensitivity among consumers, influenced by recent inflation rates affecting food services. The company introduced a 'Lighter Portion Entrées' menu, offering smaller servings of seven selected dishes, including Chicken Parmigiana and Lasagna Classico, at a reduced price point of $12.99 to $13.99. This initiative aims to complement the existing menu rather than replace it, reinforcing Olive Garden’s commitment to providing value to its customers. During an earnings call led by Rick Cardenas, president and CEO of Darden Restaurants, it was indicated that initial customer feedback has been positive. Customers reported a 15% higher perception of affordability when dining at locations offering these lighter portion sizes. Additionally, they noted satisfaction with the amount of food served despite the reductions in portion size. Cardenas emphasized that the initiative still ensures 'abundant portions' while enhancing menu variety and price accessibility. The lighter portion entrées are available during dinner service and throughout weekends, maintaining Olive Garden's signature offerings of unlimited breadsticks and soups or salads. The operational goal is to stimulate sales growth while responding to a market that has seen a shift in demand towards more economically viable dining options. Interestingly, as Darden implements this trial period, it is also facing competitive pressure from other dining chains such as Texas Roadhouse, which recently claimed the title of America's top casual dining chain. This shift has compelled Olive Garden to reassess its service model, aiming for long-term growth and maintaining its relevance in a competitive marketplace. As this strategy rolls out, Darden Restaurants plans to monitor performance and customer feedback closely to determine the feasibility of extending the initiative across more locations in the future.