clarence otis chairmanan chief executive of darden restaurants inc,sees better days ahead for an industry that took a beating during the great recession of the recent past.otis,whose company owns olive garden,red lobster,longhorn steakhouse,and other casual-dining chains,expected the job losses that cut consumer spending to abate in the first quarter of 2010
"restaurant,histroically,are one of the frist industries to benefit coming out of recession.people have deferred big-ticket items like cars,appliances and vacations,and a meak out us a low-ticket treat" said otis
darden planned to capitalize on the recovery by doing the things it had been planning in menu development and employee training,remodelling restaurants,and preserving cash
unlike many restaurant chains that turned to heavy discounting to lure customers,darden avoided that.buy-one-get-one-free or half-off promotions"run the risk of communicating to consumers that price is the primary attre]ibute of your band and it overwhelms all the other things that go into developing a strong brabd" otis said. instead dardenintroduced new menu items at lower prices, that helped restaurants keep the same profit
at its upscale capital grille chain the company offered,for $40 per person,new seafood entrees paired with appetizers and wine from regious of the world where prices are lower or from newer vineyards that charge less than more established ones. darden also reduced the pace at which it opened new restaurants
the biggest lesson that was reinforced for him during the downturn,otis said,was to spend conservatively and to keep debt low even when times are good
discussion questions
1.what managerial roles is clarence otis emphasizing in the case just presented?
2.what challenges would restaurant managers face in implementing otis's approach to keeping the restaurants performing well during a slow period in the economy
5. what financial management practices of the darden chain might be useful to you in managing your personal finances
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