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What Does The Olive Garden Reveal About Dining Sector Recovery?

Restaurant chain Darden Restaurants, Inc. (NYSE: DRI) showed a consistent recovery in foot traffic from May through October 2020.

· 03/15/2021 13:33

Restaurant chain Darden Restaurants, Inc. (NYSE:DRI) showed a consistent recovery in foot traffic from May through October 2020. November and December 2020 saw trends move in the opposite direction, but a recovery is now underway, according to data from foot traffic analytic firm Placer.ai.

What Happened: April marked the worst month for Darden brands, led by an 86% year-over-year fall in foot traffic at the core Olive Garden brand, according to Placer.ai. Trends improved each month after until peaking at negative 25% in October.

From there, foot traffic was down 41% in November, down 42.4% in December, and moving into 2021, down 39.2% in January, and down 42% in February.

Darden's other brands, LongHorn Steakhouse, Yard House, and Cheddar's Scratch Kitchen showed poorer foot traffic trends in February versus October on a year-over-year basis.

The data also shows a significant year-over-year visit growth improvement from December into January, according to Placer.ai.

"And while there was a decline for most restaurants from January to February, this was likely caused by fewer days in the month, than the previous year as well as the extreme weather conditions most of the south and northeast faced at the beginning of the month," Placer.ai noted.

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Why It's Important: As weather trends improved into February, Darden showed further signs of a recovery, according to Placer.ai. LongHorn Steakhouse in particular saw visits down just 12.7% year-over-year for that week.

What's Next: The restaurant sector was among the most impacted industries amid the COVID-19 pandemic but encouraging signs of progress makes the case for a "strong and impressively rapid" comeback in 2021, according to Placer.ai.

(Photo: Olive Garden/Darden Restaurants)