When You Cross Olive Garden and Red Lobster You Get …

Darden's combo restaurants aren't as odd as they sound

   

When You Cross Olive Garden and Red Lobster You Get …

Fast-food combo joints — think Yum Brands‘ (NYSE:YUM) all-in-one Taco Bell and KFC stores — have popped up across the country, but there aren’t many casual restaurant chains going the hybrid route. That could soon change.

Darden Restaurants (NYSE:DRI), owner of Olive Garden, Red Lobster and several other popular casual dining establishments is working on a few initiatives to breathe new life into its restaurants.

red lobster darden 630 200x200 When You Cross Olive Garden and Red Lobster You Get ...
Investors Should Continue to Gobble Up Darden

One strategy? Combining a small Olive Garden with a small Red Lobster to make one full-sized restaurant.

The company has already opened three Olive Garden-Red Lobster restaurants in smaller U.S. cities, Bloomberg reports, and more might be on the way.

Opening the combo restaurants in smaller cities makes a lot of sense. It’s simply not always cost-effective to open both a full-sized Olive Garden and Red Lobster in an area populated by about 20,000 people. However, combining two smaller versions of each chain into a single restaurant is a nice fit.

The concept isn’t as odd as it appears at first glance. Unlike fast-food combo stores that are popular among travelers, the Olive Garden-Red Lobster stores have separate dining rooms and entrances. They do, however, share a bar, kitchen and restrooms for patrons.


Article printed from InvestorPlace Media, http://investorplace.com/2012/07/when-you-cross-olive-garden-and-red-lobster-you-get/.

©2014 InvestorPlace Media, LLC

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