Olive Garden announces menu price hike after losing customers

Olive Garden is set to keep hiking up its prices after experiencing a downturn in sales last quarter, with the CEO making it clear they are steering clear of discount-driven strategies to win back customers. Despite suffering sales losses and customer falloffs, discounts have been ruled out, as revealed in Thursday's earnings call.

Darden execs have put the blame squarely on inflation, which has left some of their consumer base, particularly those below the median household income, feeling the pinch, according to Raj Vennam, the company's financial chief: "The pullback is mostly at the below-median household income. ... our other [customer] groups are stable or growing."

Parent company Darden Restaurants, which operates fan favorites like Olive Garden, Longhorn Steakhouse, and Cheddar's Scratch Kitchen, unveiled plans for an across-the-board price bump by 2% to 3% over the course of the next year, reports ABC 27.

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Having already implemented a 1% menu price uptick last year, Olive Garden is preparing its patrons for another increase that will extend through all the establishments under the Darden umbrella.

With this pricing strategy, Darden anticipates a promising 1% to 2% escalation in sales by 2025.

The fast-food industry has been witness to a staggering 31% surge in pricing over the decade, with McDonald's recording a whopping 100% spike, the highest observed.

This announcement comes amidst what can only be described as an escalating "price war" within the restaurant sector. Competing chains have begun rolling out super saver offers, aiming to draw customers back.

In a direct response to the outcry over rising costs, McDonald's made waves with the introduction of its new $5 meal deal.

Wendy's and Starbucks have also jumped on the value meal bandwagon, with Wendy's offering a $3 breakfast deal and Starbucks serving up a $6 breakfast sandwich and coffee combo.