To explain the momentum, Lee brought up long-term initiatives ignited about four years ago. After a two-year stint as chief operations officer of Ruby Tuesday, Todd Burrowes returned to LongHorn as president in July 2015. He served as EVP of operations at the steakhouse from May 2008–June 2013 and was a member of Darden’s team since 2002.
Burrowes’ homecoming ran alongside Darden’s early efforts into a full-throttle simplification project, or back-to-basics operating model, as the company calls it. In 2014, when Darden began the process in earnest, it was designed around a rather uncomplicated point: Grow guest counts with better execution through simplification. A focus on food, service, atmosphere and stronger employee engagement.
When Lee stressed this mantra following Darden’s Q4 report, it sounded pretty similar to comments made four years ago, which, arguably, is why it’s been successful. “The LongHorn team continues to successfully execute their long-term strategy of investing in the quality of the guest experience, simplifying operations to drive execution, and leveraging a unique culture to increase team member engagement,” Lee said.
As this mantra matured into day-to-day operational muscle memory, LongHorn ratcheted up performance. It’s worked to create promotions that leverage core menu items that shift mix favorably. LongHorn benefits from a strong add-on sales business, which isn’t Olive Garden’s wheelhouse. But that fact, along with an effective promotional construct, likely wouldn’t have been possible without first nurturing LongHorn’s “core” through menu reduction and better execution. Without trimming offerings and bulk, and improving cooking techniques, consistency, quality, and delivery, would LongHorn even have a core to pull from? Or at least one guests easily recognize? Would those items be worth calling out in marketing?
An example of how this is working: In the third quarter, LongHorn saw inflation tick up, mainly due to beef. Cost of sales as a percentage was unfavorable at LongHorn compared to the rest of Darden’s concepts, by about 10 basis points. What needed to be considered, though, CFO Rick Cardenas pointed out, was that LongHorn’s quality efforts were pushing more customers toward higher-end steaks, which have a higher cost of sales. A T-bone steak versus a sirloin, and so on. LongHorn’s investments shifted the conversation, and the brand was in the midst of an adjustment period. Yet that was clear proof Darden’s efforts pushed customers where the company wanted.