Maybe there is such a thing as too many breadsticks.
In a nearly 300-page treatise on what's wrong with Olive Garden and its management, investor Starboard Value suggests the Italian restaurant chain is being reckless with its unlimited breadsticks. The hedge fund notes the chain's official policy is to bring out one breadstick per customer at a time, plus an extra for the table.
But Starboard says servers bring out more than that, leading to waste — and cold breadsticks. Starboard notes that it isn't pushing for an end to unlimited breadsticks, just more control in how they're doled out.
"Darden management readily admits that after sitting just 7 minutes, the breadsticks deteriorate in quality," Starboard said in its presentation.
The incredibly detailed document was released Thursday and lays out how Olive Garden could improve its performance. It's part of Starboard's push to take control of the board of the chain's parent company, Darden Restaurants Inc.
The company, based in Orlando, Florida, has come under fire for failing to fix declining sales at its flagship chain. In the latest quarter, Olive Garden's sales fell 1.3 percent at established locations as fewer diners visited.
Darden said in a statement that its "Olive Garden Brand Renaissance" is already under way. It said it will review Starboard's plan, but noted that many of the 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.
Read the Full ArticleMembers help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.