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Traffic Slump at Olive Garden, Red Lobster, LongHorn; Smaller Plates, Cheaper Items at Olive Garden ^ | March 4, 2013 | Mike Shedlock

Posted on 03/04/2013 11:31:50 AM PST by Kaslin

High gasoline prices coupled with 2% payroll tax hikes is going to take a bite out of restaurant sales this year. For some chains the slump has already started.

Consider Darden Restaurants, the owner of Olive Garden, Red Lobster, LongHorn Steak House. Darden Restaurant Traffic is down an average 4.5, with Red Lobster leading the pack down 7.5%.

Smaller Plates, Cheaper Items at Olive Garden

At Olive Garden, Smaller, Cheaper Plates are on the way, along with new uniforms including a more contemporary black button-down shirt and black slacks.

Don't worry, endless breadsticks remain.

Olive Garden is also creating a new logo and toning down its the "Old World Style" Tuscan stonework and wooden archways that have been a signature part of Olive Garden restaurants since 2000.

Saturation Everywhere

The main problem is saturation. I see endless miles of restaurants on strips nearby. Those restaurants include Steak & Shake, Red Lobster, Olive Garden, Pizza Hut, Subway, China Express, Chili's, Chipotle, Panera, and other chains intermixed with some local eateries.

If the problem is saturation (and it is), spending money on architecture style changes, creating a new logo, and the new uniform changes is a waste of money, especially the architectural revisions.

People want good food, fast friendly service, and good value.

To pick up market share, restaurants need to lower prices, not make logo changes. And lower prices will take a bite out of earnings. One final point: as soon as restaurants stop expanding (and they will), the hiring will stop with it.

Japan Central Bank Nominee Pledges to Do Whatever Needed to Combat Deflation; Mother of all Pyrrhic Victories

Those who thought Japanese Prime Minister Shinzo Abe was not serious in his pledge to defeat deflation (and destroy the Yen in the process) need think again.

Haruhiko Kuroda (Abe's nominee to head Japan's central bank) pledges to do Whatever Needed to Combat Japan Deflation.

Haruhiko Kuroda, nominated to be the next Bank of Japan governor, said that a central bank under his leadership would do whatever is needed to combat 15 years of deflation.

“I would like to make my stance clear that we will do whatever we can do,” Kuroda, the president of the Asian Development Bank, said in a confirmation hearing in the parliament in Tokyo today.

Prime Minister Shinzo Abe’s nomination of Kuroda has raised expectations for more aggressive monetary easing to revive the world’s third-biggest economy after Masaaki Shirakawa exits the job on March 19. The opposition Democratic Party of Japan, the largest party in the upper house, has signaled it will back Kuroda, easing his passage through a split parliament.

Kuroda said in an interview this month that falling prices exacerbate real debt burdens, and give an incentive to companies and households to postpone spending. Consumer prices excluding fresh food fell 0.2 percent in January. The price gauge hasn’t advanced 2 percent -- the central bank’s new target -- for any year since 1997, when a national sales tax was increased.
Mother of all Pyrrhic Victories

Any country determined to wreck its currency can indeed do just that. However, QE alone will not suffice if all the printed money sits as excess reserves. If QE fails, what's next? More bridges to nowhere?

Regardless, the idea that higher prices are a blessing is blatant stupidity. The last thing aging Japan citizens need is rising prices.

If anything, low interest rates are counterproductive because Japanese savers get zero % on their savings (having less interest income to spend). Sound familiar? It should because Bernanke has the same preposterous ideas.

Once sentiment turns (and it will - but I do not know when), Japan is going to have a hard time preventing the bottom from falling out of the yen. When that happens, the defeat of deflation is going to be the mother of all Pyrrhic victories.

TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS: bhoeconomy; darden; layoffs; obamacare; restaurants
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To: Kaslin

Smarter former restaurant customers preparing for bond collapse, skyrocketing interest rates, “haircuts” for both bond investors and pensioners, repudiation of debt, huge downward currency adjustments, being laid off, foreclosures, etc. The USA won’t be able to afford pork for most government and government-linked employees then.

41 posted on 03/04/2013 12:30:48 PM PST by familyop (We Baby Boomers are croaking in an avalanche of rotten politics smelled around the planet.)
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To: F15Eagle

Sorry, I’m just in the mood to gross you people out with the illegal aliens serving and handling your food.

42 posted on 03/04/2013 12:31:09 PM PST by Haddit
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To: petitfour

I just wish we had one good restaurant! LOL.

Closest good Mexican restaurant is in Clinton, so I get there once a year.

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To: Kaslin; Safetgiver; Pox; I Drive Too Fast; petitfour
Seems like every Olive Garden I've gone to has seen fit to saddle us with some waiter whose real name is Tony Martinez but who feels compelled to call himself "Antonio Martino" and to obnoxiously a-play-a uppa da Italiano accento, capiche?
44 posted on 03/04/2013 12:36:12 PM PST by martin_fierro (< |:)~)
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To: Kaslin

I don’t know how some people consider Olive Garden “real” Italian food????

45 posted on 03/04/2013 12:41:04 PM PST by 1217Chic
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Comment #46 Removed by Moderator

To: 1217Chic

I went once with my daughter to our Olive garden, but we left because I couldn’t decide what to order

47 posted on 03/04/2013 12:44:33 PM PST by Kaslin (He needed the ignorant to reelect him, and he got them. Now we all have to pay the consequenses)
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To: martin_fierro

Go to ‘ In and Out” Burger

48 posted on 03/04/2013 12:45:28 PM PST by BooBoo1000 (Some times I wake up grumpy,,, other times I just let her sleep.)
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To: Safetgiver

We have a place like that here.

Funny thing is they buy mainly local produce and meat (in season) so you have an old Mexican man and an old Iowan of Norwegian stock trying to discuss prices.

I have seen it a few times. It seems to end with them both having a beer and laughing.

49 posted on 03/04/2013 12:45:42 PM PST by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: Kaslin

I think the only thing I would enjoy would be the soup,salad and the fake breadsticks...LOL

50 posted on 03/04/2013 12:47:50 PM PST by 1217Chic
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To: Kaslin
...coupled with 2% payroll tax hikes...

I'm sure they meant to say "coupled with the restoration of President Obama's 2% payroll tax reduction in advance of the 2010 election..."


51 posted on 03/04/2013 12:51:48 PM PST by Political Junkie Too (If you are the Posterity of We the People, then you are a Natural Born Citizen.)
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To: AlaskaErik
I was also at a Red Lobster in Utah recently, but up in the Sugarhouse area of SLC, where it was standing room only. Some places(and maybe states) seem to be doing well, but I've noticed a lack of traffic in other establishments. They recently opened a Black Bear Diner in Sandy and you get a ton of food on your plate for the price! I don't think any of the selections are healthy, but it is good!
52 posted on 03/04/2013 12:56:14 PM PST by aegiscg47
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To: EQAndyBuzz
Went to Red Lobster last week. It is worse than swill.

I'll second that. I went a couple weeks ago for a coworker's birthday. It's her favorite restaurant. I hadn't been in one in more than a decade. Portions were tiny, prices exhorbitant, quality lousy.

53 posted on 03/04/2013 12:58:29 PM PST by Hoffer Rand (There ARE two Americas: "God's children" and the tax payers)
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To: onyx

We have learned to make some really good salsa and pico de gallo with fresh ingredients via the Mexican groceries here. Our problem is finding good chips that compare to restaurant style chips. The grocery that caters to the Mexican population sells ok chips that we heat, but they are just not the same.

I am surprised there are no Mexican restaurants there. Everywhere we have lived, we have found decent Mexican places. It has been so long since I was in your area that I can’t think of ANY restaurants much less good ones.

54 posted on 03/04/2013 12:59:40 PM PST by petitfour
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To: Pox

I miss the veal piccatta

55 posted on 03/04/2013 1:02:02 PM PST by sportutegrl
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To: Safetgiver

Salad bowl and pasta figioli suits my diet and my taste

56 posted on 03/04/2013 1:04:17 PM PST by morphing libertarian
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To: Vigilanteman

Nice strategy! :-)

57 posted on 03/04/2013 1:04:34 PM PST by knittnmom (Save the earth! It's the only planet with chocolate!)
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To: sportutegrl

Did someone say "picatta"?

58 posted on 03/04/2013 1:04:56 PM PST by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: Fiji Hill

As in Richard m. Nixon?

59 posted on 03/04/2013 1:08:06 PM PST by morphing libertarian
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To: petitfour

I recommend flour tortilla chips. Only place I’ve had them.......caballo blanco sacramento

60 posted on 03/04/2013 1:11:04 PM PST by morphing libertarian
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