Friday, September 12, 2014

Maybe there is such a thing as too many breadsticks

[VV note: Or maybe it's the food that's not so great....]

Investor takes Olive Garden to task; critiques chain right down to the breadsticks

NEW YORK — Maybe there is such a thing as too many breadsticks.

In a nearly 300-page treatise on what's wrong with Olive Garden and its management, investor Starboard Value suggests the Italian restaurant chain is being reckless with its unlimited breadsticks. The hedge fund notes the chain's official policy is to bring out one breadstick per customer at a time, plus an extra for the table.

But Starboard says servers bring out more than that, leading to waste — and cold breadsticks. Starboard notes that it isn't pushing for an end to unlimited breadsticks, just more control in how they're doled out.

"Darden management readily admits that after sitting just 7 minutes, the breadsticks deteriorate in quality," Starboard said in its presentation.

The incredibly detailed document was released Thursday and lays out how Olive Garden could improve its performance. It's part of Starboard's push to take control of the board of the chain's parent company, Darden Restaurants Inc.

The company, based in Orlando, Florida, has come under fire for failing to fix declining sales at its flagship chain. In the latest quarter, Olive Garden's sales fell 1.3 percent at established locations as fewer diners visited.

(Continued here.)

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