(WJET/WFXP) — Olive Garden has announced that it will continue to raise prices, following a drop in sales last quarter.
The CEO stated that the company is still avoiding offering discounts to attract customers, despite a decrease in sales and loss of customers. During the company’s earnings call held on Thursday, Darden executives attributed the sales slump to the financial stress of inflation, which is affecting a portion of their customers.
The pullback is mostly at the below-median household income. … our other [customer] groups are stable or growing
Raj Vennam, Financial Chief
Darden Restaurants, the company that owns and operates restaurants like Olive Garden, Longhorn Steakhouse and Cheddar’s Scratch Kitchen, reported they will be increasing prices company-wide by an average of 2% to 3% over the next year. Olive Garden had already seen a 1% increase in menu prices last year. This price increase would be seen across all of the restaurants that Darden owns.
With this plan, Darden estimates they will see a 1% to 2% growth in sales in 2025.
Prices across fast-food chains have seen a 31% rise in the past 10 years, McDonalds seeing the highest increase at a 100% inflation rate.
This comes as a “price war” is unfolding in the restaurant industry. Many chains are beginning to offer deeply discounted deals in an attempt to attract more customers. McDonalds recently announced a new $5 meal deal attempting to address concerns over the rising prices.
Wendy’s and Starbucks also joined in offering value meals. Wendy’s offering a $3 breakfast and Starbucks offering a $6 breakfast sandwich and coffee combo.