Darden Has Big Plans For Lobster, Longhorn

ORLANDO-Darden Restaurants executives are looking to expand two of its chains, one that is its oldest concept, as well as a newly acquired brand. Unit growth is on the horizon for long-time chain Red Lobster and Longhorn Steakhouse, which the company bought earlier this year as part of its acquisition of Rare Hospitality International.

Darden’s management is in the process of giving Red Lobster a makeover, and has rolled out a “Bar Harbor” prototype in three of its 680 units, with four remodels underway. The chain will experience “significant unit growth” over its next fiscal year, said Andrew Madsen, Darden’s COO, during its second-quarter conference call.

In the case of Longhorn, management sees a potential of 600 to 800 US locations, from the nearly 300 it currently operates. The chain, which is mainly east of the Mississippi, will gradually move west, but is now currently filling in its existing markets, Madsen said.

Of its three largest chains, same-store sales at the 628-unit Olive Garden performed the best during the second quarter, which ended Nov. 25, rising 3.2% year over year. Red Lobster inched up 0.1%, while Longhorn posted a 3.9% decline. Executives blamed macroeconomic conditions on sales softness.

For the entire fiscal year, Darden’s management predicts same-store sales at Longhorn, Olive Garden and Red Lobster will rise between 2% and 4%. The company forecasts the addition of 65 new restaurants through May.