A very large brand often has trouble developing new ideas because the path to growth seems impossible to make a meaningful impact on the bottom line.
McDonald’s, for example, once owned a stake in Chipotle, before selling it in 2006.
“In 2005, McDonald’s decided to focus on its core brand. The company’s leadership wanted to streamline operations and put all its resources back into strengthening the McDonald’s identity. Owning other brands, such as Chipotle, Boston Market, and Donatos Pizza, was seen as a distraction,” according to Flavor365.
Exiting two of those three brands turned out to be good moves, but selling Chipotle, a decision confirmed in a 2006 McDonald’s press release, turned out to be a major strategic misstep.
Large restaurant companies often struggle to measure small concepts that have a meaningful impact on overall revenue. The same dynamic is now playing out at Darden Restaurants, which has decided to close its Bahama Breeze brand, citing it as a smaller concept in the company’s portfolio, according to a Darden press release.
Earlier this year, Darden shared that “the Bahama Breeze brand, and its 28 locations, is no longer a strategic priority and it will consider strategic alternatives, including the potential sale of the brand or conversion of restaurants to other Darden brands,” the company shared in a press release.
Now, the restaurant operator that owns Olive Garden, with 900 locations, and Longhorn Steakhouse, with 591 restaurants, has decided to simply close 14 locations of the Bahama Breeze brand and convert the remaining 14 locations to another Darden brand.
“The company does not expect these actions to have a material impact on its financial results.”
Blackbox’s vice president of insights and knowledge, Victor Fernandez, sees operational chains as a challenge with declining sales.
“In an environment where overall inflation has driven up costs by nearly a third since 2019, it’s virtually impossible for a unit to remain viable after losing sales of 30% or more,” he said in a statement to Nation’s Restaurant News.
Darden’s decision is in line with an ongoing trend among large restaurant operators.
“Closing Bahama Breeze and restructuring half of its sites looks like Darden is doubling down on brands where it sees clear returns at each restaurant, similar to how peers like Brinker International and Bloomin’ Brands are focusing on their core banners like Chili’s and Outback,” SimpleWallet reported.
in Kissimmee, Fla. Bahama Air, where I’ve eaten occasionally over the years, will be the last to close. On a recent visit, earlier this year, the restaurant was busy with a wait of about 20 minutes, which was typical during my previous visits to this place.
(Tags translated) Darden Restaurants
