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Olive Garden, Red Lobster See Sharp Drop In Profits After Anti-Obamacare Campaig


By 121212   Follow   Fri, 21 Dec 2012, 9:42am PST   2,129 views   35 comments
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http://americablog.com/2012/12/obamacare-critic-olive-garden-red-lobster-drop-in-profits.html

http://thinkprogress.org/health/2012/12/20/1365461/olive-garden-red-lobster-see-sharp-drop-in-profits-after-anti-obamacare-campaign-backfires/

Olive Garden, Red Lobster See Sharp Drop In Profits After Anti-Obamacare Campaign Backfires

Obamacare critic Olive Garden/Red Lobster reports 37% drop in profits

Whether there’s a connection between Olive Garden / Red Lobster parent company, Darden Restaurants, reporting bad numbers and their flip-flopping on Obamacare is hard to say.

Customers of those restaurants are certainly middle class people, most of whom know all too well how difficult and expensive healthcare can be, so it’s not unreasonable to think the earlier criticism of Obamacare had some negative impact.

Earlier this month, it was reported that Darden’s CEO was concerned about the bad publicity, but that he was making efforts to provide healthcare to at least some of their employees. Darden did eventually come around.

“Although our workforce historically has been heavily part-time, we have always had a significant number of full-time employees and they are integral to our success,” said Darden chairman and CEO Clarence Otis. “The data we have collected during our test around guest satisfaction and employee engagement has only reinforced this. As we think about healthcare reform, while many of the Patient Protection and Affordable Care Act’s rules and regulations have yet to be finalized, we are pleased we know enough at this point to make firm and hopefully reassuring commitments to our full-time employees.”

Was blaming Obamacare real, or just an excuse for missing the numbers? Again, it’s hard to say. Data shows that criticism of Obamacare by CEO’s has hurt the image of companies, though nobody can make a direct link to poor numbers, yet. The ongoing economic crisis could just as easily be responsible for bad performance. Many families still feel financially insecure, and going to restaurants is often an expense that gets cut.

Darden seemed to eventually be doing the right thing by exploring the process of adding healthcare for at least some employees. Was it too little, too late or was the damage already done? Whatever the answer, the public does seem to be in a bad mood lately with CEOs, former CEOs, rich people and companies who are bashing Obamacare, or at least, access to healthcare for employees.

The Huffington Post is suggesting the earlier Obamacare criticism is linked to the drop in sales, but I’m less convinced. The criticism may not have helped, but to blame the unfortunate public statements about Obamacare on such a huge revenue decrease, a 37% profit drop, sounds too easy.

It’s time for businesses to get on board with Obamacare, and quit causing self-inflicted wounds, or the image of self-inflicted wounds on their businesses. Maybe it means a few less dollars at the top, but is that really such a crisis to whine about?

Comments 1-35 of 35     Last »

Peter P   Fri, 21 Dec 2012, 9:51am PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 1

My only criticism of Obamacare is that it does not go far enough.

Universal healthcare is essential to a free enterprising society because employees should not be chained to employer-provided group policies. They should be encouraged to innovate, start businesses, and compete freely.

We should have something like the NHS. Of course, there should be a private system as well for the niche markets, because I also believe in choice.

121212   Fri, 21 Dec 2012, 9:55am PST   Share   Quote   Permalink   Like (4)   Dislike     Comment 2

Peter P says

My only criticism of Obamacare is that it does not go far enough.

OMFG we agree again!

Yup, Obamacare needs more oomph.. It was just a start, remember it took 100years to get that!

NHS on steriods for the USA would be great.

Peter P   Fri, 21 Dec 2012, 9:58am PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 3

And I somehow believe universal healthcare will cost taxpayers LESS than the current programs combined (e.g. medicare, medicaid, etc).

121212   Fri, 21 Dec 2012, 10:00am PST   Share   Quote   Permalink   Like (4)   Dislike (1)     Comment 4

Peter P says

And I somehow believe universal healthcare will cost taxpayers LESS than the current programs combined (e.g. medicare, medicaid, etc).

$718 Billion less, as of now.

Peter P   Fri, 21 Dec 2012, 10:10am PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 5

It is quite silly not to embrace universal healthcare. It is just all because of special interests.

I consider myself a Thatcherite and I am to the right of Milton Friedman on many issues. But universal healthcare is as basic as national defense for a country.

elliemae   Fri, 21 Dec 2012, 2:08pm PST   Share   Quote   Permalink   Like (1)   Dislike (2)     Comment 6

My niece and nephew live in a smaller town, and were once employed at an Olive Garden.

They pay their employees shit wages and treat them like dirt. The managers are mean and staff members are judged by what they do on their own time. It's a horrible place to work, and I haven't eaten at either restaurant since.

Peter P   Fri, 21 Dec 2012, 2:41pm PST   Share   Quote   Permalink   Like   Dislike     Comment 7

I don't eat at places where employees are mistreated. This is not a philosophical thing. But I get better service with happy employees.

Homeboy   Fri, 21 Dec 2012, 4:05pm PST   Share   Quote   Permalink   Like   Dislike     Comment 8

Peter P says

My only criticism of Obamacare is that it does not go far enough.

Universal healthcare is essential to a free enterprising society because employees should not be chained to employer-provided group policies. They should be encouraged to innovate, start businesses, and compete freely.

We should have something like the NHS. Of course, there should be a private system as well for the niche markets, because I also believe in choice.

Wow, I agree with Peter P on something. I think that's actually twice now.

Homeboy   Fri, 21 Dec 2012, 4:08pm PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 9

What probably also isn't helping Olive Garden is that their food sucks.

elliemae   Sat, 22 Dec 2012, 1:28am PST   Share   Quote   Permalink   Like (2)   Dislike (3)     Comment 10

Homeboy says

What probably also isn't helping Olive Garden is that their food sucks.

Let's not forget overpriced. But according to some poll by a LV newspaper, the best seafood restaurant was Red Lobster and the best italian restaurant was.... Olive Garden.

OMG!

APOCALYPSEFUCKisShostikovitch   Sat, 22 Dec 2012, 1:33am PST   Share   Quote   Permalink   Like (2)   Dislike (1)     Comment 11

elliemae says

Homeboy says

What probably also isn't helping Olive Garden is that their food sucks.

Let's not forget overpriced. But according to some poll by a LV newspaper, the best seafood restaurant was Red Lobster and the best italian restaurant was.... Olive Garden.

OMG!

If I took out full page ads on Sunday, I could shit on toast and get a Best of designation from the newspaper.

elliemae   Sat, 22 Dec 2012, 3:34am PST   Share   Quote   Permalink   Like (1)   Dislike (3)     Comment 12

APOCALYPSEFUCK is Shostakovich says

If I took out full page ads on Sunday, I could shit on toast and get a Best of designation from the newspaper.

Apoco-shitz. I can see it now.

Homeboy   Sat, 22 Dec 2012, 4:36am PST   Share   Quote   Permalink   Like   Dislike     Comment 13

zzyzzx   Thu, 27 Dec 2012, 3:54am PST   Share   Quote   Permalink   Like (2)   Dislike (3)     Comment 14

I'm sure that the pending fiscal cliff has nothing to do with restaurant profits dropping. Article fails to mention how other restaurant chains are doing.

CaptainShuddup   Thu, 27 Dec 2012, 4:09am PST   Share   Quote   Permalink   Like (1)   Dislike (3)     Comment 15

I call it the Pink Shrimp. Shrimp is 95% of Red Lobsters menu.
Their cheddar biscuits are the only reason to go.

121212   Thu, 27 Dec 2012, 4:32am PST   Share   Quote   Permalink   Like (3)   Dislike (3)     Comment 16

zzyzzx says

I'm sure that the pending fiscal cliff has nothing to do with restaurant profits dropping. Article fails to mention how other restaurant chains are doing.

Can you read?

Olive Garden, Red Lobster See Sharp Drop In Profits After Anti-Obamacare Campaign Backfires

I can tell you that other restaurants are at about last years seasonly adjusted figures.

You think 40% down is wide spread?

Dumb ass.

beershrine   Thu, 27 Dec 2012, 5:30am PST   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 17

Thinkprogess? really this story is all twisted. Sales are up at Darden so is profit...and the sheep go.....Baaaahhhhhh

Thedaytoday   Thu, 27 Dec 2012, 5:32am PST   Share   Quote   Permalink   Like (3)   Dislike (1)     Comment 18

beershrine says

Thinkprogess? really this story is all twisted. Sales are up at Darden so is profit...and the sheep go.....Baaaahhhhhh

Really!.............


http://online.wsj.com/article/SB10001424127887324461604578191282730576340.html

Darden Profit Drops 37%

Darden Restaurants Inc.'s DRI +0.29% fiscal second-quarter profit fell 37% as same-restaurant sales at all three of its major chains sank, led by Olive Garden's decline.

Darden, whose primary chains include Olive Garden, Red Lobster and LongHorn Steakhouse, earlier this month lowered its sales growth expectations for the year due to worse-than-expected second-quarter results.

The company began stumbling coming out of the recession, when its rivals offered deep discounts to attract attention, while it refrained from similar promotions to avoid hurting profit margins. In late 2010, Darden said it would shift its strategy—focusing more on low prices rather than the quality of its food in advertisements. But two years later, Darden is still struggling to find the right balance.

Meanwhile, Darden is turning to its specialty-restaurant group, which includes higher-end chains such as Capital Grille and Bahama Breeze, to help it expand. The company built up that business in August with its $585 million purchase of Yard House USA Inc., a pub-style chain with about 40 locations.

For the period ended Nov. 25, Darden reported a profit of $33.6 million, or 26 cents a share, down from $53.7 million, or 40 cents a share, a year earlier. Acquisition-related costs for Yard House hurt the bottom-line by about five cents. The company earlier this month had forecast 25 cents to 26 cents a share.

Sales rose 7% to $1.96 billion, just above predictions of $1.95 billion from analysts polled by Thomson Reuters.

By chain, same-restaurant sales fell 3.2% at Olive Garden, the company's biggest chain by revenue. At Red Lobster, same-restaurant sales were down 2.7%. LongHorn posted 0.8% lower same-restaurant sales.

Those three chains combined posted a same-restaurant sales decline of 2.7%.

Same-restaurant sales at the specialty restaurant segment grew 0.7%.

Darden affirmed its full-year guidance.

http://www.bizjournals.com/tampabay/blog/morning-edition/2012/12/darden-profits-drop-37-percent-for-the.html
Darden profits drop 37 percent for the quarter

thomaswong.1986   Thu, 27 Dec 2012, 6:03am PST   Share   Quote   Permalink   Like (1)   Dislike (2)     Comment 19

121212 says

Again, it’s hard to say.

no its just the typical Obama mob hit Chicago style.

how about going straight to the press release... seems there is no link to such a claim if you read the actual text to the official press release and look at the top line revenue sales.....

http://finance.yahoo.com/news/darden-restaurants-reports-second-quarter-120000246.html

OLIVE GARDEN'S second quarter sales of $849 million were 1.5% higher than the prior year, driven by revenue from 46 net new restaurants offset by a 3.2% decrease in U.S. same-restaurant sales. For the quarter, on a percentage of sales basis, lower food and beverage expenses offset an increase in restaurant expenses and depreciation expense, which resulted in an increase for the quarter in operating profit, but a decrease in operating profit as a percentage of sales.

RED LOBSTER'S second quarter sales of $590 million were 2.1% lower than the prior year as a result of a U.S. same-restaurant sales decrease of 2.7% that was offset somewhat by revenue from five net new restaurants. For the quarter, on a percentage of sales basis, lower food and beverage expenses and restaurant labor expenses were more than offset by an increase in restaurant expenses, selling, general and administrative expenses and depreciation expense, which resulted in a decrease for the quarter in both operating profit and operating profit as a percentage of sales.

LONGHORN STEAKHOUSE'S second quarter sales of $275 million were 7.8% higher than the prior year, driven by revenue from 32 net new restaurants offset by a U.S. same-restaurant sales decrease of 0.8%. For the quarter, on a percentage of sales basis, higher food and beverage expenses, restaurant labor expenses, restaurant expenses and depreciation expense resulted in a decline for the quarter in both operating profit and operating profit as a percentage of sales.

thomaswong.1986   Thu, 27 Dec 2012, 6:16am PST   Share   Quote   Permalink   Like (1)   Dislike (3)     Comment 20

121212 says

Can you read?

Olive Garden, Red Lobster See Sharp Drop In Profits After Anti-Obamacare Campaign Backfires

I can tell you that other restaurants are at about last years seasonly adjusted figures.

You think 40% down is wide spread?

Dumb ass.

I guess this is also a backlash....Barnes & Noble closing 150 stores nationwide .

or that Fresh Choice has also gone under... all in the past month.

Popular salad buffet Fresh Choice goes dark - San Jose Mercury ...
www.mercurynews.com/.../popular-salad-buffet-fresh-choice-...
Dec 14, 2012 – Fresh Choice, known for its salad buffets and farm-to-fork ideals, has shuttered the last of its stores after failing to appease creditors and to ... The exterior dining area of the now closed Fresh Choice restaurant in Walnut Creek,

Thedaytoday   Thu, 27 Dec 2012, 7:09am PST   Share   Quote   Permalink   Like (4)   Dislike (2)     Comment 21

thomaswong.1986 says

Fresh Choice has also gone under... all in the past month.

Owned and shuttered by Tesco's

Because it was a failure. That's the market speaking.

Barnes & Noble closing 150 stores nationwide because we moved to e-books and tablets

Capitalism speaks.

Econ101   Thu, 27 Dec 2012, 7:49am PST   Share   Quote   Permalink   Like (1)   Dislike (3)     Comment 22

The real problem is that healthcare is too EXPENSIVE. Rather than address the underlying issue of cost, the government is going to try to force universal access of a limited supply of services to everyone in the country.

Guess what is going to happen when 30 million more people are going to have access to healthcare but there are ZERO additional new doctors, nurses and hospitals.

Hint: The same thing that has happened to housing and education costs...

thomaswong.1986   Thu, 27 Dec 2012, 7:53am PST   Share   Quote   Permalink   Like (2)   Dislike (2)     Comment 23

Thedaytoday says

Owned and shuttered by Tesco's

Because it was a failure. That's the market speaking.

Barnes & Noble closing 150 stores nationwide because we moved to e-books and tablets

Capitalism speaks.

as is the case with the other restaurants.. simply lower or higher demand... but no connection to any backlash over ObamaCare.

Thedaytoday   Thu, 27 Dec 2012, 7:54am PST   Share   Quote   Permalink   Like (3)   Dislike (2)     Comment 24

thomaswong.1986 says

Thedaytoday says

Owned and shuttered by Tesco's

Because it was a failure. That's the market speaking.

Barnes & Noble closing 150 stores nationwide because we moved to e-books and tablets

Capitalism speaks.

as is the case with the other restaurants.. simply lower or higher demand... but no connection to any backlash over ObamaCare.

Provide me with some evidence!

APOCALYPSEFUCKisShostikovitch   Thu, 27 Dec 2012, 8:33am PST   Share   Quote   Permalink   Like (4)   Dislike     Comment 25

these slop houses and just fucking gross. you know that the people who work there take long sloppy shits into the pots in the kitchen.

121212   Thu, 27 Dec 2012, 8:49am PST   Share   Quote   Permalink   Like (2)   Dislike (2)     Comment 26

http://www.zdnet.com/good-bye-books-hello-e-books-7000009208/

noodlesphilly   Thu, 27 Dec 2012, 9:05am PST   Share   Quote   Permalink   Like   Dislike     Comment 27

I love red lobster and will still be going. Also we got a postcard in the mail the flexie account goes from 5,000 to 2,500 nice .glad my hubby retire this year .

APOCALYPSEFUCKisShostikovitch   Thu, 27 Dec 2012, 10:38am PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 28

Any restaurant that pays as poorly as these slophouses only invite the employees to jack their noses in the soup.

zzyzzx   Thu, 27 Dec 2012, 11:52am PST   Share   Quote   Permalink   Like   Dislike (2)     Comment 29

APOCALYPSEFUCK is Shostakovich says

these slop houses and just fucking gross. you know that the people who work there take long sloppy shits into the pots in the kitchen.

And they spit in the food too.

zzyzzx   Thu, 27 Dec 2012, 11:55am PST   Share   Quote   Permalink   Like   Dislike (2)     Comment 30

I'd rather eat at Texas Roadhouse anyway.

http://www.texasroadhouse.com/

APOCALYPSEFUCKisShostikovitch   Thu, 27 Dec 2012, 12:22pm PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 31

zzyzzx says

APOCALYPSEFUCK is Shostakovich says

these slop houses and just fucking gross. you know that the people who work there take long sloppy shits into the pots in the kitchen.

And they spit in the food too.

Right and when the chefs are really pissed off at the management at breakfastime they make scrambled eggs by feeding eggs and Alka Seltzer to the dog who lives in the dumpster behind the restaurant and then let it powerbarph all over the griddle.

Homeboy   Fri, 28 Dec 2012, 3:55am PST   Share   Quote   Permalink   Like   Dislike     Comment 32

Econ101 says

The real problem is that healthcare is too EXPENSIVE. Rather than address the underlying issue of cost, the government is going to try to force universal access of a limited supply of services to everyone in the country.

Guess what is going to happen when 30 million more people are going to have access to healthcare but there are ZERO additional new doctors, nurses and hospitals.

Hint: The same thing that has happened to housing and education costs...

Um, getting more customers doesn't raise costs; it lowers them. Which would net more money - a restaurant that is full of customers, or a restaurant that is half full? Econ 101.

121212   Fri, 28 Dec 2012, 4:02am PST   Share   Quote   Permalink   Like (2)   Dislike (1)     Comment 33

zzyzzx says

I'd rather eat at Texas Roadhouse anyway.

I wouldn't , even if you paid me!

zzyzzx   Thu, 3 Jan 2013, 11:39am PST   Share   Quote   Permalink   Like   Dislike (2)     Comment 34

I take it that you have never eaten at Texas Roadhouse???

APOCALYPSEFUCKisShostikovitch   Thu, 3 Jan 2013, 11:44am PST   Share   Quote   Permalink   Like   Dislike     Comment 35

zzyzzx says

I take it that you have never eaten at Texas Roadhouse???

Does the staff crap in the chili? I'd pay a buck to see that.

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