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Investor: Olive Garden Too Free With Breadsticks – The Ledger

Investor: Olive Garden Too Free With Breadsticks – The Ledger

In this May 22, 2014 photo, patrons enter an Olive Garden Restaurant in Short Pump, Va. Olive Garden is hurting itself by piling on too many breadsticks, according to an investor that’s disputing how the restaurant chain is run. (AP Photo/Steve Helber)

Published: Friday, September 12, 2014 at 9:58 p.m.
Last Modified: Friday, September 12, 2014 at 9:58 p.m.

NEW YORK | Olive Garden is hurting itself by piling on too many breadsticks, according to an investor that’s disputing how the restaurant chain is run.

In a wide-ranging critique, the hedge fund Starboard Value said Olive Garden restaurants lack training and discipline, and that servers bring too many breadsticks to the tables at a time.

That leads to waste — and cold breadsticks, Starboard said.

The investor notes that the official policy is to provide one breadstick per customer, plus an extra for the table, but that servers don’t stick to that.

The document is part of Starboard’s push to take control of the board of Olive Garden’s parent company, Darden Restaurants Inc.

Darden, based in Orlando, has come under fire for failing to fix an ongoing sales decline at Olive Garden despite a revamped menu and marketing. In the latest quarter, Olive Garden’s sales fell 1.3 percent at established locations.

Darden said in a statement that its “Olive Garden Brand Renaissance” is already underway. It said it will review Starboard’s plan, but noted that “upon initial review, we believe many of the brand and cost optimization strategies are already being implemented across our company and are showing results.”

Part of Olive Garden’s troubles stem from the growing popularity of places like Chipotle, where people feel they can get food comparable to a sit-down restaurant for less money.

But Starboard also criticized Darden’s management of Olive Garden, including its “outdated” advertising strategy, which it said focuses too heavily on TV ads. It also took issue with the chain’s new logo, quoting a tweet by a restaurant analyst that said it looked as though it was written like “a second-grader’s cursive practice.”

Among Starboard’s other complaints in the document issued Thursday were Olive Garden’s failure to salt the water used to boil its pasta and its liberal use of salad dressing, which it said drives up costs.


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