Legendary family-favorite chain to hike prices - as inflation weary customers say 'just shut down'

Olive Garden bosses have revealed they'll be raising prices this year in despite lackluster sales, angering the very customers they're trying to appeal to.

Darden Restaurants, which owns Olive Garden, said the beloved Italian chain's same store sales - or sales at locations that have been open at least a year - dipped 1.5 percent in the quarter ending on May 26. 

In response, executives said they will hike prices 2.5 to 3 percent at not just Olive Garden but across its massive portfolio of restaurants, including LongHorn Steakhouse, Ruth's Chris Steakhouse and Yard House.

This decision comes even though the company at large increased sales 8.6 percent to $11.4 billion in fiscal year 2024, driven mostly by LongHorn Steakhouse's outperformance.

Customers across social media said Olive Garden is going in the exact wrong direction and should 'read the room,' especially since years of ultra-high inflation has chipped away people's ability to spend on things like dining out. 

Olive Garden was an underperforming asset in Darden Restaurants' portfolio during the fourth quarter, with the Italian chain retreating 1.5 percent in same-store sales. 

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The move to raise prices isn't new, since Olive Garden already made their menu 1 percent more expensive last year.

It appears to be doubling down on charging more even as executives admit food inflation is battering its least well-off customers.

'Consumers are generally concerned about inflation and they are becoming more concerned about the job market. And what we're seeing are some behavior shifts that we had already started to see, ' Darden CEO Rick Cardenas said on the call. 

Darden CFO Raj Vennam said the drop in sales was due to a pullback from those with lower incomes, whereas customers with deeper pockets are hitting up Olive Gardens at the same rate or more.

But Cardenas said Darden-owned restaurants won't entertain discounts like some other fast food chains have.

'We're not going to do things to buy sales, even with the increasing discounting our competitors are doing,' he said.

Overwhelming majorities of Americans now say they barely ever eat at fast food restaurants due to inflation and see dining out as a luxury out of their reach. 

Given these facts, Olive Garden opting to increase prices even more is confusing and frustrating for many.

One person wrote on X: 'Olive Garden is raising prices because food inflation has reduced the number of people eating out. Can someone explain this logic[?]'

Another wrote that the restaurant 'may as well just shut down.'

Another person reacted on TikTok, saying Darden's C-suite executives are 'tone deaf.'

'If you're losing foot traffic and customers and you realize that consumers are struggling, it might not be the best time to brag about raising prices,' he said in the video.

'The board needs to start looking for a new executive team and a CEO and CFO that are not so tone deaf.'

Darden Restaurants CEO Rick Cardenas, left, and CFO Raj Vennam were called 'tone deaf' on social media for their joint decision to raise prices across all restaurants when inflation remains a persistent struggle for low-income families

Chili's, another sit-down casual dining establishment, is going in a different direction than Olive Garden. On top of offering all-day, every-day happy hour in some locations, Chili's is doing a '3 for Me' meal for $10.99 that includes a beverage, an appetizer and an entrée

Applebee's is also going after the crowd looking to spend less money on a night out. Specifically, it wants to court couples with its '2 for $25' deal that comes with two entrées, an appetizer to share or two side salads

Chain restaurants have been under pressure to cut prices for months, especially because grocery store prices have been rising at a slower rate.  

It appears that this summer, fast food joints are finally caving to consumer demands, with McDonald's most notably introducing a $5 value meal Tuesday. 

Wendy's is offering a $3 breakfast combo meal for a limited time, while Burger King is bringing back its $5 Your Way Meal for the summer.  

Even sit-down casual dining chains more similar to Olive Garden are testing out discounted combo meals.

Chili's, on top of offering all-day, every-day happy hour in some locations, is doing a '3 for Me' meal for $10.99 that includes a beverage, an appetizer and an entrée.

Applebee's is hoping to attract couples with its '2 for $25' deal that comes with two entrées, an appetizer to share or two side salads.