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Once a holdout on offering delivery for the casual diner, Olive Garden is reversing course and will use Uber to deliver breadsticks and pasta.
Darden Restaurants, the chainās parent company, announced Thursday an āexclusive multi-year delivery partnershipā with Uber that will begin later this year at a limited number of Olive Garden locations and likely expand nationally to its more than 900 locations next May if the pilot is successful.
Olive Garden already offers delivery through its website and app for catering orders with a $100 minimum, delivered by the restaurantās employees. Moving forward, the chain will outsource the delivery to Uber Eats drivers. However the restaurant still wonāt be available on the the Uber Eats app and food can only be ordered on Olive Gardenās website and app.
āGuests have been asking us for home delivery options and they continue to show they are willing to pay for the convenience,ā said Darden CEO Rick Cardenas in a press release. He added Uber was a āclear choiceā for a partnership because itās giving the chain guest data and insights that doesnāt hamper its ācompetitive advantages and simple operating model.ā
Darden has shunned services like Uber and DoorDash in the past, saying that splitting the revenue with third-party service erodes the companyās profitability and the food isnāt delivered to its standards. Even during the height of the pandemic, Olive Garden didnāt use the services, although the services benefited their competitors.
Shares of Darden (DRI) jumped 9% in midday trading. The partnership likely alleviated some of the pain of a dismal quarter for Olive Garden, which reported a 2.9% drop in same-store sales for the quarter.
Since the start of the pandemic, chains have been hiking prices dramatically ā partially because of increasing costs and partially because customers didnāt seem to mind spending more. But recently, diners have started to push back so restaurants started offering temporary discounts on those higher menu prices.
Olive Garden doesnāt offer many discounts, like its competitors do. Instead, its strategy has been to hold off on raising prices as much as it can, as well as bringing back promotions like its popular never-ending pasta deal earlier this year to help the chainās bottom line.
Darden reiterated its full-year outlook and said sales across its brands, which also include Yard House, Ruthās Chris and Longhorn Steakhouse, have improved in recent weeks.
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