On a conference call with investors on March 23, the firm, which is the parent company of a number of fine dining restaurants as well as the casual dining franchises Olive Garden and LongHorn Steakhouse, stated that despite inflationary pressures, people continue to dine out.
According to CEO Rick Cardenas, there is a conflict between what people want and what they can pay. “Consumers continue to seek value, which is distinct from low prices. While eating out is still an affordable luxury for most consumers, food spent away from home is one of the most difficult expenses to reduce. Consumers are compromising on their purchases.
Significantly, Cardenas’ statements go against what clients have to say about their own behavior. In order to save money in the face of inflation, 78% of those polled for the study “Consumer Inflation Sentiment: Inflation Slowly Ebbs, but Consumer Outlook Remains Gloomy” stated they are eating more frequently at home.
According to Cardenas, the clientele of the business has not yet fully recovered from the frequency drop. He asserted that if this happened, the restaurants would initially see customers making more careful judgments during each visit, such as deciding to skip dessert or choose less priced menu items.
Consumers “typically regulate their check first, and then they’ll manage their visits afterward,” says Cardenas. Also, we haven’t seen anything yet in terms of check management.
