Editor’s note: This is the third in a series of stories on the state of casual dining based on exclusive Market Force Information data. Check out the first article on First Watch’s rise to the top, and where the breakfast segment is headed, and why the biggest players in casual dining should court family gatherings.

Former Carrabba’s Italian Grill president Michael Kappit put it simply. If there’s one thing the Italian casual-dining industry understands, it’s competition. But unlike many of its segment peers, like Applebee’s, Red Robin, Chili’s, and so forth, Italian concepts are surrounded not so much by each other, but by independents. Kappitt said for every multi-unit Italian brand in the country, there are four local venues.

(Update: Bloomin’ Brands announced February 13 that Kappit, along with Bonefish EVP Jeff Carcara, would be leaving the company as part of a restructuring. Outback Steakhouse president Gregg Scarlett assumed responsibility for the domestic operations of both brands).

Also unique to the segment, there really isn’t much fast-food intrusion to speak of. Outside of Fazoli’s, pizza chains, and some upstart fast casuals, Italian is not a sector with deep counter-service roots.

So, where does that leave category stalwarts like Carrabba’s, Maggiano’s, and Olive Garden? They’re chasing an ideal that isn’t all that easy to reach. “It’s not lost on us when we say we want to be a great neighborhood restaurant that we’re also a chain,” Kappitt told FSR previously. “You wink and smile when you say it, but it really, sincerely is our aspiration. I think guests understand that.”

Carrabba’s has tried to flip this conversation on its head in recent years, using size and resources to directly improve customer experience. Typically, economics of scale center on purchasing power and marketing. Or the ability to weather cost burdens, like labor and delivery, and think long term—something many local spots don’t have the luxury of doing since they live day-to-day, operational fire-to-fire.

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Check out the overall rankings

Cracker Barrel sits atop the general-menu category

Yet to Kappitt’s point, chains do face consumer perception roadblocks. And it might just be more pronounced in Italian food than anywhere else in casual dining. Every town has a local, Italian joint. Just like it has take-out Chinese restaurants.

How can you compete with those established, neighborhood spots? First, lead with heritage. Carrabba’s founder, Johnny Carrabba, still operates the original two Houston locations. Kappitt said this reality keeps Carrabba’s “honest and on course.”

There are family recipes on Carrabba’s menu that were featured on opening day in 1986. Maggiano’s didn’t update its full menu until 2017. It puts pictures of each restaurant’s chef on the menu of every individual location. They make table visits and discuss allergies and food preferences with guests. “It’s pretty cool,” chief concept officer Larry Konecny said earlier. “Because you just saw the chef on the menu and then they’re at your table.”

Konecny said casual-dining, in general, has struggled lately thanks to a copy-cat syndrome of sorts. Beyond “trying to become all things to all people,” many chains, especially those with significant guest affinity, were tempted to chase competitors’ core equities. The idea of, it’s working for them, why can’t it work for us?

Konecny says this, more than anything, is how Maggiano’s unchains its chain perception in the eyes of guests. It draws a line in the brand value sand. “I think being authentic is critical,” he said. “It can’t just be a strategy. It has to be a part of your brand essence. So anytime we do any menu innovation or change any design element, or any cue that the guest notices, we have to be aware of who we are and what we stand for.”

Carrabba’s, Bloomin’ Brands’ second-largest chain next to Outback at 226 restaurants, long grew by sticking to the proposition of authentic Italian food served at affordable prices. But the result was often complicated and disruptive LTOs that challenged execution and were difficult—and expensive—to market against. On a side note, and more on this later, Olive Garden understands and courts execution through simplicity as masterfully as any restaurant chain in America.

Like all of Bloomin’s concepts, though—Bonefish and Fleming’s round out the portfolio—Carrabba’s started pulling away from deep discounting lately in favor of “healthy traffic,” generated through better execution of its core menu.

Notably, Carrabba’s began targeting more proprietary programs and special occasions, focusing on rebuilding its guest base via long-term differentiators, like superior food and service, and family-geared initiatives.

You see this with weekly programs, like Amore Monday (three-course meals starting at $12.99) and Founders Favorites Tuesday (original items brought back).

The crown jewel, however, according to Kappitt, are Carrabba’s monthly wine dinners. Kappitt said fervent guest response to the program illustrates a key point for Carrabba’s and other sit-down Italian chains nationwide: The definition of value isn’t price driven in this field. Not among this competitive set. Often value represents the price you pay for the experience you get.

Case in point, Carrabba’s wine dinners produce the highest value for money ratings in the chain’s system, despite running $50 per person.

This is a place Italian chains can separate from local restaurants. Massive loyalty programs, like Bloomin’s Dine Rewards platform, offer brands the chance to segment data and create VIP clubs. Programs that present value behind the dollar and point-based models typically seen in quick service—places Italian chains struggle to compete with. Experience-forward and personalized loyalty platforms open the door for multi-unit concepts to court repeat visits through inclusion and events, not one-day incentive-laced barrages.

One example for Carrabba’s was its March 2019 Carnevale Celebration. Rewards members were invited to a special event complete with Venetian masks, Aperol Spritz glasses, and festive food and drinks, like Lamb Lollipops, for $40 a person. Two years ago, there was a Feast of 7 Fishes dinner.

Data also guides improvement where it matters, too. Carrabba’s put 50 percent more chicken in pasta dishes from listening to customers. It increased pour sizes of wine.

Olive Garden bumped the chicken serving in its alfredo dish and value scores soared. Darden’s 867-unit flagship, which continues to front the industry from a performance standpoint (21 consecutive periods of same-store sales growth) has really rewritten what it means to win with value in Italian dining.

Darden’s “back-to-basics” operating policy is a few years old now, and it laid the foundation for Olive Garden to build a menu that works top to bottom. The heart of Olive Garden’s innovation core is built around “multi-purpose value.” Embedded deals that stretch across the menu. Some value in price, some in portion, “as we try to attract and talk to each and all the different constituents we have for consumers,” Darden CEO Gene Lee said last quarter.

“I would say that Olive Garden is the value leader, and that we need to stay focused on that in making sure that we have the appropriate price point for all the consumers that want to use Olive Garden,” Lee added. “And I think that we have the ability to lead in that, not just follow.”

The construct looks something like this: There remains a guest base inside Olive Garden that chase value by the price point. So, the brand knows there always needs to be an offer out there. Without the entry point, those critical “value seekers,” will simply go somewhere else. Yet Olive Garden also pays attention to abundance. Maggiano’s courts that concept as well, something it calls, “equity of abundance,” and is a critical feature of Italian dining in the chain arena in general.

“And so, we’ve got to think across a broad spectrum and define value different for each opportunity,” Lee said. “But we have to have something for that consumer that is very deal oriented and we know we have to have something out there most of the time.”

The prime demographic at Olive Garden is 35–55. That’s good news for the brand, Lee said, because it’s a spending-friendly segment starting to mature with plenty of room ahead. In terms of millennials in particular—a group on the cusp of entering this window and staying there for a while—Lee said the guest segment shouldn’t be overgeneralized. They like choice, which is why Olive Garden’s customizable Cucina Mia platform has done so well. Yet they’re not all dollar-value hungry as some might assume. That changes as millennials transition into the next phase of their lives.

“This is a very millennial friendly brand. It is a very social brand, and I would tell you that millennials love the value of Olive Garden because they can stretch their dollars,” Lee said.

That doesn’t always mean spending as little money as possible. And that’s where Olive Garden has really separated from the pack with everyday value. Setups like the Early Dinner Duos for $8.99, continued everyday meal and drink specials, such as 5 Drinks for $5, $7.99 lunch, and $5 Take-Home Entrees.

Olive Garden also introduced a new weekday lunch menu a couple of quarters ago with 21 options under $10—a move intended to strengthen the everyday promise.

All of this is starting to paint a very different Italian casual chain landscape than recent years. Less deals, incentives, and LTOs. More experiential-forward messaging. And everyday value that centers on abundance and quality. Sound a little like that local, revered Italian spot?

That’s no mistake.

Now, let’s get into Market Force Information’s results for the three brands.

As a reminder, Market Force Information’s annual casual-dining study surveyed 6,598 U.S. customers on their eating habits, brand preference, visit frequency, brand engagement, customer experience, meal delivery, and social media usage.

The rankings and results

Continuing a trend we’ve seen so far across all categories in casual dining, the family occasion is heating up. There was a bit more disparity for Italian brands that others, however.

• General family meal: 52 percent
• Brought children (under 18 years old): 22 percent
• General social gathering with friends: 20 percent
• Celebrated a special occasion: 17 percent
• Romantic dinner or date night: 14 percent
• Made a reservation ahead of time: 12 percent
• Business meal with colleagues: 5 percent

Of the respondents polled, 38 percent said they dined at a casual Italian spot in the past 90 days. That’s on par with 2017 and two points less than 2018.

There is definitely room to encourage repeat visits through better execution, as the below graph shows.

Graph from Market Force Information

And, once again, there’s simply no denying margin for error is small, especially with word-of-mouth marketing, which is a whole different beast these days thanks to social media.

Graph from Market Force Information

In terms of recent traffic, Olive Garden blew away the field. Keep in mind there were 867 Olive Gardens at the end of Q2. Carrabba’s had 226 restaurants. Maggiano’s 52.

Which of the following Italian casual dining chain restaurants have you visited more recently?

• Olive Garden: 70 percent
• Carrabba’s: 8 percent
• Maggiano’s: 7 percent

But perhaps a good sign concerning Carrabba’s recent changes, the brand led with first-time visitors. There’s an opportunity to showcase the chain to a new generation of (hopefully) future loyal guests.

• Carrabba’s: 11.6 percent
• Maggiano’s: 9.1 percent
• Olive Garden: 3.9 percent

This also speaks to Olive Garden’s strong affinity with repeat customers.

A loyalty battle is being fought across Maggiano’s and Carrabba’s.

Graph from Market Force Information

Maggiano’s, which was crowned the top overall chain in Market Force’s 2019 study, dipped a bit year-over-year.

Graph from Market Force Information

Let’s talk satisfaction

These are the traits customers ranked most important to their Italian dining experience. Interestingly, while some guests celebrate special occasions at these brands, they didn’t necessarily find recent experiences special.

• Clean interior/exterior: 57 percent
• Friendly service: 55 percent
• Inviting atmosphere: 50 percent
• Good variety in menu options: 45 percent
• High-quality food: 42 percent
• Good value for money: 39 percent
• Fast service: 37 percent
• Good specials/promotions/coupons available: 33 percent
• Sensitive to food allergies: 31 percent (Maggiano’s has topped this metric through AllergyEats’ rankings in the past)
• Healthy food choices: 28 percent
• Was more of an experience than just a meal transaction: 28 percent

While not too high at the bottom, the general-menu category scored just 18 percent on the experience measurement.

And here’s the full look:

Graph from Market Force Information

As you can see in the following chart, there is plenty of parity in Italian casual dining. The three chains are all knocking at the door for supremacy.

Graph from Market Force Information

The issues

Only 6 percent of customers said they experienced a problem at their last Italian dining experience.

Here’s what they did about it:

• Talked to a staff member at the location: 59 percent
• Nothing: 29 percent
• Wrote a negative comment on social media: 10 percent
• Completed an online survey: 9 percent
• Contacted the brand’s call center: 6 percent
• Wrote a negative tweet: 4 percent
• Other: 4 percent

No matter the category, it’s always wise to give customers an outlet to voice their issues. One, it allows staff to remedy the issue and hopefully inspire a future visit. Two, it could prevent the problem from hitting social media and taking on a life of its own.

What were the issues? The first category is troubling, but it also provides plenty of room for tangible improvement.

Graph from Market Force Information

All things that need to be taken into consideration

Graph from Market Force Information

Olive Garden had the lowest problem experiences. Carrabba’s was best at resolving the issues.

Olive Garden

• Experienced a problem: 5.8 percent
• Resolved to satisfaction: 41 percent

Maggiano’s

• Experienced a problem: 6.4 percent
• Resolved to satisfaction: 42 percent

Carrabba’s

• Experienced a problem: 10.1 percent
• Resolved to satisfaction: 48 percent

Into the delivery world

This is an interesting category to break down. Olive Garden has empathically resisted third-party delivery. Maggiano’s has offered delivery for about a decade and features its own catering teams in every restaurant with vehicles. But it’s since added third-party as well for delivery. Carrabba’s recently decided to use multiple aggregators to complement its own delivery network—a decision that rolled in September.

Olive Garden, meanwhile, keeps investing capital dollars into restaurants to have the space and equipment to handle growing off-premises demand. It does promote what it calls “last-mile delivery,” which allows the brand to control the experience. Customers can access the option if they spend $75 or more and call before 5 p.m. Olive Garden will deliver the order in that scenario. Lee said it’s a big and growing business for the brand, with average checks in the $300 range.

Market Force’s data backed up the unique nature of delivery in Italian casual dining. That “own delivery service” number is very high. It was only 10 percent for general-menu chains.

Graph from Market Force Information

Beyond Olive Garden’s concern that it muddies its value proposition, there are quality issues.

Graph from Market Force Information

The social discussion

Call this a good or bad thing (both arguments can be made) but not many people are heading to social media before going to one of these three brands. Only 8 percent of customers said they read a review before declining to go.

• Maggiano’s: 12.8 percent
• Carrabba’s: 9.7 percent
• Olive Garden: 7 percent

A trend is forming with Olive Garden. Clearly, people know the brand and what they’re getting into when they choose to dine there.

Where are the reviews coming from:

Graph from Market Force Information

The app chart below has some interesting learnings. Discounts and promotions are still key. But there are many purposes available to promote.

Graph from Market Force Information

Overall, Italian chains will thrive when they combine authenticity with operational excellence and loyalty, and value local restaurants can’t compete with. That’s the winning proposition.

Next time, we’ll explore the steakhouse category, and where brands like Texas Roadhouse, Outback, Longhorn, and Logan’s Roadhouse stack up.