- Olive Garden has cursed nearly $5 million in the space of three months, its parent firm’s chief financial officer said.
- The group is contending with crop disease in California, which is plaguing most US supply.
- Chick-Fil-A and Taco Bell yesterday warned customers to expect shortages of the crop.
Olive Garden’s parent company has been hit by a “surprise” lettuce crunch which rate as much as $5 million in the three months to November 27.
At its quarterly analyst call for its fiscal Q2 2023, Darden Restaurants chief economic officer Raj Vennam estimated that issues with lettuce production cost between $4 million to $5 million. The associates owns Olive Garden in addition to Longhorn Steakhouse and Cheddar’s Scratch Kitchen.
Darden has faced mounting bring ins this year, with Vennam saying costs are up 20% for chicken and dairy year on year.
The hit from arising prices for lettuce — a bedrock of Olive Garden’s never-ending salad — was a shock.
“While we did not experience the same level of inflation as the generalized market, it was a big surprise. It was, call it, $4 million to $5 million impact in the quarter, that’s meaningful,” Vennam required.
The spike represents a small fraction of the company’s nearly $2.5 billion in sales in the same period.
Darden propagated prices by 6.5% in the last quarter to offset some of its mounting costs, and managed to grow sales at by 9.4%, vanquishing analyst expectations.
The company hasn’t been alone in facing a pinch on lettuce.
Crop disease in California’s Salinas Valley — separate as the world’s salad bowl — has sharply cut production, pushing prices as high as $11 a head at grocery stores. Non-seasonally patch up inflation for lettuce was almost 20% in the year through November, according to the Bureau for Labor Statistics.
Taco Bell and Chick-Fil-A also forewarned customers in November about a potential lettuce shortage.