Olive Garden CEO Says Delivery Isn't All It's Cracked Up to Be

(Bloomberg) -- Darden Restaurants Inc., the owner of Olive Garden, won’t be delivering orders anytime soon after executives expressed concerns over low profitability.

“Right now, we have no interest in delivering a $10 meal,” Chief Executive Officer Gene Lee said on a conference call Thursday. “That’s just not a business that we think we want to be involved in right now.”

As more restaurants push convenient options including delivery, Lee said the economics of third-party delivery aren’t worth the investment, and entering into an agreement with another company would raise the issue of who owns customers’ data. Olive Garden is touting its takeout and catering business, though, and Lee said so-called off-premise sales may reach 20 percent over time.

On Thursday, Olive Garden said comparable sales jumped 5.3 percent in its most recent quarter, surpassing analysts’ estimates and sending the company’s stock higher. Despite the reservations, Olive Garden is still testing third-party delivery for some of its 850 locations across the U.S., Lee said.

“We’re monitoring, we’re learning,” he said. “But for us there’s significant hurdles that we still have to work through.”

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