Boatloads of breadsticks, too much salad dressing, false wait times, excessively long asparagus, and other grievances of an activist hedge fund gunning for change at the pasta powerhouse.
Keith Bedford / Reuters
Olive Garden and its parent company, Darden Restaurants, have issues. So many issues, in fact, that Starboard Value, the activist hedge fund trying to replace the entire board, enumerated them in a 300-slide presentation it released to investors late last night ahead of Darden's annual meeting next month.
In response, Darden released a statement saying that it's own improvement plan is in the works, and the company believes Olive Garden is on the right track.
"While we will carefully and thoughtfully review Starboard's plan, which has been promised by Starboard for some time, upon initial review," the company stated, "we believe many of the brand and cost optimization strategies are already being implemented across our company and are showing results."
Starboard founder Jeff Smith has been gunning for change at Darden since December, and has been repeatedly rebuffed by the company. The feud came to a boiling point when Darden announced it would sell Red Lobster despite Smith winning majority shareholder approval for a special meeting to vote on a possible sale.
Starboard has laid out a lengthy case as to how exactly Olive Garden and Darden are failing, exploring everything down to the last splash of salad dressing and basket of breadsticks. Here's a look at what the hedge fund found.
Serious breadstick overload. Like 700 million worth.
Via tumblr.com
Starboard found that most servers at Olive Garden are breaking the company rule to deliver one breadstick more than the number of people at a table with each serving. This has resulted in an average serving of three breadsticks per customer, totaling 700 million breadsticks served per year. "The average customer does not consume 3 breadsticks," Starboard states, leading to massive breadstick waste. Also, the breadsticks get cold and cause servers to ignore their tables as customers presumably sit in breadstick-stuffed heaven.
via IFTTT
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