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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: morphing libertarian
The Milhouses that own the Seafare are cousins of Richard Nixon.

Incidentally, Nixon's brother Donald operated a drive-in restaurant on Whittier Blvd.--called Nixon's--from 1952-1957. Great patty melts were to be had there.

61 posted on 03/04/2013 1:17:53 PM PST by Fiji Hill (Io Triumphe!)
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To: bgill
If they don’t speak English, then it’s a fair bet their illegal.

I say deport 'em if they don't know which "they're" to use!

62 posted on 03/04/2013 1:19:04 PM PST by SoothingDave
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To: SoothingDave; All

We think we get the most bang for our buck at (if the food is good) Mexican and Indian restaurants and Bob Evans. Most others are a crap shoot at best.

63 posted on 03/04/2013 1:24:45 PM PST by varina davis (A real American patriot -- Gov. Rick Perry)
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To: EQAndyBuzz

Red Lobster has terrible seafood. The driveby seafood joints in Seattle have better stuff.

Have only been to Olive Garden twice, but they seemed better. It is hard to mess up pasta and salad.

64 posted on 03/04/2013 1:35:15 PM PST by angry elephant (Endangered species in Seattle)
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To: Kaslin

Olive Garden is Moochelle’s resturant.

65 posted on 03/04/2013 2:20:47 PM PST by SaraJohnson
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To: Kaslin
How can Olive Garden plates possibly get any smaller? The only time I've ever eaten at an O.G. was 7 or 8 years ago in Florida and the portions were so small, I argued with the waitress that she had brought me a child's portion. It wasn't cheap and I left, still hungry.
66 posted on 03/04/2013 2:27:41 PM PST by Graybeard58 (_.. ._. .. _. _._ __ ___ ._. . ___ ..._ ._ ._.. _ .. _. .)
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To: OKRA2012
The last time or two we went to Red Lobster, I kept thinking that they could have at least given us larger baked potatoes... the portion sizes seem smaller, but if you leave a place “full”, it makes a big difference.

As for Olive Garden: had not been there in years, until I think we went on New Year's Day, due to few places were open, and it was the chance to eat out for our wedding anniversary. I had something that was lobster/seafood cannelloni (?), which was amazingly wonderful. It was one of the pricier items on the menu, but it did not disappoint.

67 posted on 03/04/2013 2:40:45 PM PST by NEMDF
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To: Kaslin
Since I've never eaten at any of those restaurants and don't intend to, I guess that is a good thing.

Thank you for your report.

68 posted on 03/04/2013 2:49:24 PM PST by elkfersupper ( Member of the Original Defiant Class)
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To: Kaslin

Long as they don’t mess with the salad. I don’t much care for Olive Garden’s entrees, but I love the salad.

69 posted on 03/04/2013 2:53:59 PM PST by Some Fat Guy in L.A. (Still bitterly clinging to rational thought despite it's unfashionability)
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To: All
I don't think I have eaten at either in probably 7-8 years.

We used to do take out Olive Garden because it was close to my office and the boss was buying. (:

Red Lobster was always, I thought, overpriced for the quality and amount of food. For a couple bucks more per entree, you could eat at a decent restaurant.

70 posted on 03/04/2013 2:59:18 PM PST by riri (Plannedopolis-look it up. It's how the elites plan for US to live.)
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To: Political Junkie Too
The main problem is saturation

Not really. A strong economy can support all these outfits and always has been able to do so fairly well.

The issue is --the type of society the globalists are building here is very much like a Scandinavian society on steroids.

Meaning, eating out is reserved for the elites and special occasions. McDonald's for a family of four in any of the Scandinavian countries will run you $50 and higher. TGIFs, or the like, easily well over $100. The only thing really affordable is, maybe, an immigrant run (usually Turks)pizza joint.

If they are successful at fundamental transformation of the United States, expect only a handful of these places to survive.

71 posted on 03/04/2013 3:06:15 PM PST by riri (Plannedopolis-look it up. It's how the elites plan for US to live.)
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To: Fiji Hill


72 posted on 03/04/2013 3:22:19 PM PST by morphing libertarian
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To: GeronL
Although Darden is an Orlando based Corporation, I have not been in one of their restaurants since “Black Tuesday”, 2012.
They have “crapped” in their own mess kit by backing Obama and screwing their employees with reduced hours because of Obamacare.... Talk about a screwed up company, look at who leads it. I guess the “Bro” has dun bet his company!
73 posted on 03/04/2013 3:42:17 PM PST by BatGuano (You don't think I'd go into combat with loose change in my pocket, do ya?)
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To: usmom

They’ve been doing this in grocery stores for several years. Smaller containers at the same or higher price.

74 posted on 03/04/2013 8:55:32 PM PST by Terry Mross (How long before America is gone?)
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To: max americana

When we lived in LA we often went to a little Italian place in Van Nuys that was awesome. It was tiny, one cook, two hot waitresses and cheap prices. The night before we moved back to Texas we went there to eat. When we told the owner we were moving he gave us “our last supper” for free.

About a year later I asked a friend if he was still going to that restaurant and he told me the guy got busted for selling drugs. Apparently the restaurant was a front.

75 posted on 03/04/2013 8:58:28 PM PST by Terry Mross (How long before America is gone?)
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To: Mr. Jeeves

Yes, the portions have gotten smaller and the quality has declined. However, you can see that even in the food you buy at the grocery stores. Meat is expensive and lower quality, and convenience foods are using cheaper ingredients.

We are becoming the kind of socialist dump that Obama has always wanted to create. Next we’ll be living in 800 sq. ft. apartments that have the washing machine in the kitchen, just like Europeans.

76 posted on 03/04/2013 10:08:51 PM PST by Pining_4_TX (All those who were appointed to eternal life believed. Acts 13:48)
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To: KC_Lion

Wel... sort of, but if you watch this episode of Top Gear about commie made cars, you will see that even the elite end up with crapola.

77 posted on 03/04/2013 10:24:14 PM PST by Pining_4_TX (All those who were appointed to eternal life believed. Acts 13:48)
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To: All

Hey, Darden...Elections.Have.Consequences

78 posted on 03/05/2013 2:34:18 AM PST by Prov1322 (Enjoy my wife's incredible artwork at! (This space no longer for rent))
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To: Terry Mross

Yes, I’ve noticed that, too, but at least you see the package size and price up front before you buy it. At the restaurant, you order something you have had before expecting the same thing (at the same or higher price) and then it comes and it’s like what happened?

79 posted on 03/05/2013 4:42:54 AM PST by usmom
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To: Graybeard58

, I argued with the waitress that she had brought me a child’s portion.

This just enrages me. I am a petite person and don’t eat that much, but it’s the being taken for a fool that gets me. If they want to do this, I would rather they put a note in the menu saying that they have had to increase their prices due to (insert reason) than play these little games thinking we won’t notice and just continue coming and getting ripped off. My poor husband is always leaving restaurants hungry!

80 posted on 03/05/2013 4:54:34 AM PST by usmom
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