Average Purchase At Darden (DRI) Unit Falls

Over the past week, the 24/7 Wall St.–The Channel Checkers poll surveyed various Red Lobster locations, part of Darden Restaurants (DRI), to gauge trends in the casual dining business.  We asked the following questions:

1. Is this location new? (One year or less)

2. How often is lobster being ordered compared to last year?

3. What are the most popular items on the menu right now?

4. What is the average bill size for a family of two?
• 100% of respondents said that Red Lobster had been in the locations we contacted for over a year.

• Compared to last year, orders of lobsters has been the same according to 56% of respondents. 12% of respondents said more consumers has ordered it, while 32% of respondents said that there have been less consumers ordering lobsters.

• The Ultimate Feast was the most popular menu item according to 10 respondents or 40% of those surveyed.  The Mediterranean- Grilled Lobster and Shrimp was considered the second most popular menu item by 12% of respondents.

• The average check size for a family of two is reported to be $42.76.

Conclusion of Channel Check:  The results suggest that Red Lobster’s business has been fairly constant.  According to the survey, more than 50% of respondents said that compared to last year consumers have been ordering the same amount of lobster.  Red Lobster order patterns look steady, but the average check size does appear to be lower than in our previous surveys, suggesting that price cutting is being used to lure in customer. Impact to gross margins could be an issue for Darden in 2Q.

For access to the underlying survey or for more information, please contact Jason Katz at 415.867.0959 or [email protected]