2013 Annual Report - Investor Relations - Darden Restaurants

Red LobsterRed Lobster is focusing moreon affordability and value in itspromotions and on its core menu.To win in the New Era, we have to reinvestto protect the broad appeal of our brandsand sustainably grow same-restauranttraffic. As we reinvest, Olive Garden andRed Lobster are guided by three broadstrategic priorities; 1) addressing theheightened market share contest withincasual dining by responding moreaggressively to the elevated guest needfor affordability – while being careful notto dilute our brands or guest experiences;2) delivering our current guest experiencesat a competitively superior level moreconsistently within each of our restaurantsand across our restaurant systems; and3) meaningfully innovating and redefiningour guest experiences in ways that makethem more attractive to new guests andfor new occasions.Olive Garden’s broad appeal and powerfulunit economics are the key reasons why ithas grown to over 800 locations generating$3.7 billion in total sales and average unitsales volumes of $4.6 million. As a result,Olive Garden’s annual cash contribution toDarden exceeds $455 million. In fiscal 2014,Olive Garden will reduce new restaurantexpansion to 15 net new restaurants fromthe 36 opened last year, in order to betterfocus on regaining sales momentumand consistently delivering a high-qualityguest experience in existing restaurants.Red Lobster continues to have a businessmodel that creates significant value, withannual sales of $2.6 billion and averageunit sales volumes of $3.7 million. As aresult, Red Lobster’s annual cash contributionto Darden is more than $200 million.In fiscal 2014, Red Lobster will continueits Bar Harbor remodel program, which itexpects to complete in early fiscal 2015,while opening one net new restaurant.Olive Garden and Red Lobster’s annualcash contributions, after appropriatereinvestment to ensure success in theNew Era, are the foundation for Darden’sstrong and consistent return of capitalto shareholders through the combinationof dividends and share repurchase.To win in the New Era,we have to reinvest toprotect the broad appealof our brands andsustainably growsame-restaurant traffic.Olive GardenOnline To Go ordering is oneway Olive Garden is evolvingthe guest experience.Darden Restaurants, Inc. 2013 Annual Report 11