Olive Garden’s No. 1 selling point centers on the value proposition. Asking customers to pay more for delivery just doesn’t jive with the message. “I’m watching what everybody’s doing,” Lee said. “We continue to believe, especially in Olive Garden, that it’s much better for us to focus on the catering and [the self] delivery party of this.”
Olive Garden is putting its operational strength behind that particular off-premises avenue. The chain moved the dollar size of orders down from $100 to $75. And it changed from requiring 24-hour notice to 5 p.m. the day before. Even so, Olive Garden’s average catering order is clocking well over $300, Lee said. “It’s a highly rated, from a satisfaction standpoint, event,” he said. “And so, again, we’re watching what’s happening. We don’t think that the economic burden [of third-party delivery] has changed that much. We think it’s just been shifted from the restaurant to the consumer.”
Olive Garden’s current approach pays more attention to improving capabilities and offerings. The chain recently opened a new prototype in Orlando that features a full dedicated off-premises area. Lee said it has “tremendous upside for our higher-volume off-premises restaurants.” There are units in Olive Garden’s 866-unit system pushing north of $1 million in off-premises sales.
“A lot of this business comes in and is out the door before 11:30,” he says. “And a lot of the catering that we’re starting to do now is really—it’s pre the big-meal period. So that’s really helpful.”
With these units, Olive Garden can ask itself, are there attachment opportunities? Can it attach additional sales to the normal off-premises experience? Lee provided an example: As the brand starts building these dedicated spaces, it can get more beverage sales.
“We’re still in the infancy of thinking about that, but we think it’s a fairly big idea, which could grow that overall percentage over time,” he said.
Put simply, Olive Garden believes it can grow off-premises sales without sacrificing what it does within the four walls, “which is create a great in-restaurant experience,” Lee said.
It’s too early to estimate the rollout of these new spaces, he added. It needs to be added in a specific location where the restaurant can staff it during downtimes without adding a lot of labor. It has to be close to the kitchen and have the right heating and holding areas. “I don’t want to put a price tag on it just yet,” he said.
“I don’t think we’re missing out on anything,” Lee added of third-party delivery.