Sunday, December 21, 2008

Take that, Outback

The LongHorn steakhouse chain is responding to Outback’s head-turner of a $9.99 sirloin dinner with a new steak bargain of its own. Executives of parent company Darden Restaurants said Friday that the chain is about to start pushing “a new signature steak dish” priced at under $10.

The officials didn’t reveal what type or sized steak would be offered at $9.99, but said the promotional item would be rolled out in January and backed by a new commercial. Outback's $9.99 deal consists of a complete meal centered around a 6-ounce steak.

Meanwhile, Darden's main suits told investors, LongHorn is testing a new ad campaign in 30 markets, with an introduction target of March.

LongHorn, which the company acquired in its 2007 purchase of Rare Hospitality, is the weakest of Darden’s three major brands. Olive Garden and Red Lobster are still posting positive comparable-store sales, a monumental feat in the current environment. The gains may be slight (each is under 1%), but reason to have one more glass of Chablis during LobsterFest when compared to the results for LongHorn’s last quarter. The chain’s comps fell 5.7%, while net sales increased only 2.4%, even with the opening of 19 additional outlets.

The biggest of Darden's so-called specialty brands are also feeling the recession, with significant comp declines posted for Capital Grille and Bahama Breeze. It did not break out results for Seasons 52.

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