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Breadstick Policy Unlimited at Olive Garden to Show 'Italian Generosity'

Image: Breadstick Policy Unlimited at Olive Garden to Show 'Italian Generosity'
(Olive Garden)

By    |   Tuesday, 16 Sep 2014 08:13 AM

Olive Garden's unlimited breadstick policy is simply "Italian generosity" and not an exercise in food waste, the chain's parent company said Monday in defending itself against an investor's complaint.

Starboard Value LP hurled a nearly 300-page report at Darden last week, detailing Olive Garden's faults, like the unlimited breadstick policy, low bar sales and overall profits, and poorly rated pasta dishes, Fortune magazine reported.

The fight, though, goes a little deeper than breadsticks. Starboard owns an 8.8-percent stake in Darden and acts as the company's second-largest investor, Fortune noted. The firm is looking to oust the company's current 12-member board of directors in favor of other Starboard-appointed candidates to improve the chain's economic situation.

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Darden responded to Starboard's criticism with a 24-page response of its own Monday, according to The Associated Press. The company also noted that it is implementing strategies to upgrade Olive Garden's performance, including new menu items and ordering technologies like tabletop tablets.

"After reviewing Starboard's proposed operating plan, we believe Darden's current initiatives, which are already delivering encouraging results, address the majority of Starboard's suggestions," Darden president and COO Gene Lee told Fortune. "We are also troubled by certain Starboard suggestions for Olive Garden that we believe would undermine progress that is improving both food quality and guest experience."

Even with the changes championed by Darden, the chain remains challenged in the casual dining market. Darden's U.S. same-store sales dropped 1.3 percent at Olive Garden for the latest quarter, trailing other Darden-owned restaurants like LongHorn Steakhouse and The Capital Grille, Fortune reported.

Darden also said Olive Garden's breadstick policy is meant to convey "Italian generosity," according to the AP. Richard Feinberg, a professor of retail management at Purdue University, told the Chicago Tribune that the breadstick issue at Olive Garden may not be as trivial as some may think.

"People who are not in business don't understand," Feinberg said. "It really is important for businesses to find out how to save money wherever they can. It's not a trivial issue that businesses survive, and they do it one breadstick at a time."

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Olive Garden's unlimited breadstick policy is simply "Italian generosity" and not an exercise in food waste, the chain's parent company said Monday in defending itself against an investor's complaint.
breadstick, policy, unlimited, olive garden
374
2014-13-16
Tuesday, 16 Sep 2014 08:13 AM
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