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Darden Restaurants Might Nix Automatic Tips

Darden Restaurants Might Nix Automatic Tips

Now, tipping for large parties at restaurants like Olive Garden and Red Lobster might be optional

Olive Garden, Red Lobster, and other Darden restaurants might get rid of automatic tips for large parties.

Just as high-end sushi restaurant Sushi Yasuda bans tipping altogether, Darden Restaurants has announced that it's considering dropping automatic tips at their chain restaurants, the Orlando Sentinel reports.

Darden, which owns chains like Olive Garden, Red Lobster, and LongHorn Steakhouse, has historically tacked on an automatic 18 percent tip for parties of eight or more. The practice of adding automatic gratuity is common in the restaurant industry.

Earlier this year, however, a customer sued restaurants like Olive Garden and Red Lobster for adding on automatic tips, even for smaller tables, in New York City, potentially because tourists tend to tip less than locals.

Unfortunately for these large corporations, an IRS ruling which goes into effect this January will regard automatic tips as part of wages, which could lead to higher payroll taxes for restaurants, the Sentinel reports.

Darden is currently testing out a new policy where automatic tips aren't included in the bill, but the bill will provide exact amounts for 15-, 18-, and 20-percent tips, helping customers out with the math. For now, Darden has dropped the 18-percent tip at some 100 restaurants; the restaurant company will decide on a final policy for automatic tipping at the end of the year.


Lots new at Carrabba's and Olive Garden, but is it enough to save them?

It's a battle for market share, one that seems squarely aimed at luring in those fickle Millennials or that subsequent group widely called Generation Z. Carrabba's, owned by Bloomin' Brands, and Olive Garden, owned by Darden Restaurants, seem in a race to reinvent themselves. They both recently launched dramatically revised menus incorporating a number of culinary buzzwords: small plates for sharing, lighter fare and smaller portions (and prices), specialty items with mix-and-match customizability, hand-helds, gluten-free dishes, kale, craft beer, mini dessert indulgences and — the two words that summed up 2013 — salted caramel.

We thought it was a fitting time to pay a visit to these two mega-chains (Carrabba's boasts 240 locations nationally, Olive Garden has more than 800 in North America), stopping into a South Tampa Carrabba's outpost and the Olive Garden location that opened in February on West Shore.

In my mind, Carrabba's has always been a tick more expensive than the Garden (with Macaroni Grill and Maggiano's a couple ticks above it). Sitting with the two menus side by side, the prices are virtually indistinguishable. Indeed, I tried to have a very similar meal at each with a final tally for two people of $64.61 at Carrabba's and $69.24 at Olive Garden. And overall, Carrabba's got the nod both for food quality and quality of service.

Darden shareholders have been pushing for the restaurant giant to spin off or sell Olive Garden and Red Lobster. (The restaurant group's other brands include Longhorn Steakhouse and Bahama Breeze.) Instead, execs have worked diligently to bring about a "brand renaissance" at the Garden. A just-released new logo is getting mixed feedback, but the new menu features a number of fresh and welcome ideas.

At lunchtime, the main idea is speed: In order to compete with fast food and grab-and-go concepts, they've trained servers to assess diners' time crunch and to respond accordingly. Also, adding to the unlimited soup, salad and breadsticks deal for $6.99, you can opt for a "Tuscan trio combo," which means an additional pasta side, small plate or added salad topping for $2.99 more. At dinner, a similar "cucina mia" option augments the soup/salad/breadsticks, whereby you pick a pasta, pick a sauce (and an additional topping if you feel like it), and bada bing, ringing in at a very reasonable $9.99.

The best of the more than 20 new items on the Olive Garden menu are clustered in the "Tastes of Italy" small-plate section. These dishes represent the edgiest it gets: A small plate of Parmesan-and-bread-crumb-battered asparagus is snappy and very flavorful, served with a "citrus aioli" (seemed like regular mayo only slightly yellower to me $4) a plate of olive/Parmesan fritters gets a similar treatment, a little more interesting accompanied by the Gorgonzola cream sauce option ($4.50).

Lingering at the deep-fryer for a minute, Olive Garden has added arancini, classic Sicilian risotto balls that are bread-crumbed and fried. Theirs aren't quite as zesty as the new ones on the Carrabba's menu (those are studded with fennel sausage and plopped in a slightly spicy marinara, $6), but it's an appealing shared finger food ($4.50), as is the duet of herb-flecked chicken meatballs wading in marinara ($4).

One of the nicest new dishes at Olive Garden is just about the most expensive thing on the menu ($18.99) but it stacks up ably with similar dishes at comparable restaurants: a 6-ounce fillet is grilled nicely, topped with a dollop of herb puree that reads like pesto and served with a tender-crisp medley of squashes and peppers interspersed with mellow-nutty roasted garlic cloves. Chicken Toscana ($13.99) makes use of the chain's new Piastra flat-top grill, which gives meats an even, deep sear on both sides. As a dish it's nothing special (its sticky-sweet "red wine demiglace" tastes like neither red wine nor demiglace), served with sauteed spinach and a rice pilaf masquerading as risotto.

In all, improvements like mini desserts (shades of Seasons 52, another Darden chain), Tuscan-style wings (a nod to Anthony's Coal Fired's success with that dish) and hummus (it's white bean, so Italian-ish) give Olive Garden a fighting chance. But there's a lot of competition at the $15 Italian-meal-that-includes-soup-or-salad price point, with 15 of those anchoring Carrabba's newly debuted menu.

Budget-minded diners will already be familiar with the "Amore Monday" menu (yeah, who doesn't love Mondays?), where you choose from a list of appetizers or desserts, then add a soup or salad and then an entree from three price levels, $12, $15 or $18 for the whole shooting match — a bunch of the new dishes appear on that Monday menu.

The single best dish we tried from the new menu was a gorgeous vanilla bean panna cotta served in a jar and topped with sweet-tart fresh raspberries ($6). In recent months, I've eaten overly rubbery versions of this Italian custard at a number of high-end restaurants, and Carrabba's got it plushly perfect.

Before that, though, I was impressed with new prosciutto-wrapped pork tenderloin medallions (a real steal at $13.90). In the past, I've felt that what makes a lot of Carrabba's dishes taste good is liberal use of cream or butter — this one eschews that in favor of deep savoriness imparted by wood smoke and prosciutto, counterbalanced by a touch of sweetness in a port wine fig sauce, nicely accessorized with a passel of tender-crisp green beans.

Tomato cream sauce is the dominant flavor in the new rigatoni Martino ($14), with planks of grilled chicken, sun-dried tomato and sliced mushroom, as well as in the shrimp and scallop linguine alla vodka ($15), the latter's vodka demure enough that the sauces tasted identical. To my mind, a more contemporary dish was the new grilled Tuscan skewers ($15), juicy sirloin sandwiched between soft grilled cherry tomatoes and lengths of red onion, all drizzled with a simple but appealing red wine sauce.

Since the deeply awful economic woes of 2008 and 2009, the restaurant industry has been slow to bounce back, with sit-down restaurants losing out to fast food and the like (read: places you don't have to tip). It's clear that both of these restaurant giants have a lot of smart people working furiously to keep pace with food trends while giving customers perceived value. The jury's out on whether the launch of new menus at Olive Garden and Carrabba's will keep both concepts healthy in a competitive market, but both offer a number of appealing dishes that keep dining out affordable for most of us.


IRS Rule Leads Restaurants to Rethink Automatic Tips

Olive Garden has long included automatic 18% tips for parties of eight or more, but may stop.

An updated tax rule is causing restaurants to rethink the practice of adding automatic tips to the tabs of large parties.

Starting in January, the Internal Revenue Service will begin classifying those automatic gratuities as service charges—which it treats as regular wages, subject to payroll tax withholding—instead of tips, which restaurants leave up to the employees to report as income.

The change would mean more paperwork and added costs for the restaurants—and a potential financial hit for waiters and waitresses who live on their tips but don't always report them fully.

Darden Restaurants Inc., owner of Olive Garden, LongHorn Steakhouse and Red Lobster, has long included automatic 18% tips on the bill for parties of eight or more at its more than 2,100 restaurants, but is experimenting with eliminating them because of the IRS ruling, said a spokesman.

The chain in July stopped automatic tips at 100 restaurants in four cities, where it is testing a new system in which the restaurants include three suggested tip amounts, calculating for the customer the total with a 15%, 18% or 20% tip on all bills, regardless of party size. Diners can opt to tip more or less than the suggested amounts, or to not tip. Depending on how patrons react and how well the new software system works, Darden may switch to such suggested tips at all of its restaurants. A spokesman said the company will decide by year-end.


Workers at Olive Garden, related chains to get pay raise, bonus

(AP) - The company that runs the Olive Garden chain is raising pay for its workers and handing out one-time bonuses, a sign of optimism from the kind of casual sit-down restaurant that has been devastated by the pandemic.

Darden Restaurants said Thursday that every hourly restaurant worker will earn at least $10 per hour including tips as of Monday. That will rise to $11 per hour in 2022 and $12 per hour in 2023.

Darden, which also runs LongHorn Steakhouse, Cheddar’s Scratch Kitchen and other chains, said it will spend an additional $17 million one-time bonuses for its nearly 90,000 hourly employees. Workers will receive between $100 and $300 depending on how many hours they work each week.

The company on Thursday reported a surprisingly strong quarter and the pay hikes signal both confidence about an economic recovery and potentially increased competition for workers as the U.S. emerges from the pandemic.

A year ago this month, Darden closed all of its dining rooms. Casual dining chains were especially hard hit because unlike pizza places or fast foot chains, they had neither drive up windows nor well-established delivery service to offset the loss of business due to pandemic restrictions.

At one point, same-store sales at Darden, a key reading in retail for the health of a company, plunged 75%.

About 99% of Darden’s dining rooms have since re-opened with at least partial capacity. The rapid vaccine rollout and stimulus checks are fueling sales this year. For the week ending March 21, same-store sales for the Orlando, Florida, company rose 5% compared with the same period in 2019.

About a third of Darden’s sales still come from carryout orders, but the company expects that to shift back to the dining room as more people are vaccinated and the economy recovers.

“It’s getting to a point where, you know, I think we’re cautiously optimistic and excited about what’s going to transpire here over the next few months, maybe few years,” said CEO Eugene Lee during a call with industry analysts Thursday.

In the fiscal third quarter, which ended Feb. 28, Darden’s sales fell 26% to $1.73 billion, better than the $1.6 billion Wall Street had expected, according to FactSet.

The company’s net income fell 44% to $128.7 million, or 98 cents per share. That easily beat the 70 cents analysts had forecast.

Darden shares jumped almost 5% Thursday, the largest percentage gainer on the S&P 500, and it led the entire consumer discretionary sector higher.

Darden said its average hourly worker already makes $17 per hour. But some currently make the federal minimum wage of $7.25 per hour, so the raise will ensure that all workers make at least $10 per hour.

“Continuing to attract and retain the best talent in the industry will be critical to our success,” Lee said in a letter to employees.


Here's a tip: gratuities should reflect good service

Two weeks ago, I ate dinner at Roger Brown's Restaurant & Sports Bar in Portsmouth with my husband and a friend.

When we got the bill, it included an automatic gratuity, amounting to 18 percent of the meal cost. That was unusual. Many restaurants add a gratuity with large parties, but I rarely see that on tabs for fewer diners.

Roger Brown's usually applies an auto-grat only for tables of six or more, on late-night meals or during big events with a full house of patrons, Rene Holst, a manager for the restaurant, told me last week. The tip added to my check was a possible mistake or might have resulted from a packed house for the beginning of football season, he said.

That evening, I added $2 to bring the total tip up to 20 percent, because our server was particularly attentive and accommodating. I've grown used to automatic tips, or "auto-grats," as those in the restaurant business call them, and keep an eye out for them when I eat with a larger group.

My general philosophy, though, is tips should be discretionary and based on the quality of service. The consumer should decide whether the service merits extra payment and how much.

Tipping is one of those consumer subjects that invokes passionate opinions. One of my editors is adamant that he'll walk out of a restaurant if it adds an automatic gratuity to his check, even for a large group.

The IRS has proposed a rule change that would classify an automatic tip as a "service charge," part of the restaurant's regular wages and counted toward its payroll taxes, starting in January. In response, Darden Restaurants, which owns the Olive Garden and Red Lobster chains, recently announced that it was rolling back its auto-grat policy for large tables in certain cities.

Restaurant operators say they have good reason for adding tips to the bill. Eric Stevens and Karl Dornemann, who own Bardo and The Public House in Norfolk and Still and Gosport Tavern in Portsmouth, said they give the server the option of applying an 18 percent tip on the tabs of tables of eight or more and disclose that policy on their menus.

In a large group, "people generally don't figure in the tax and the tip when they're splitting the bill," Dornemann explained. In those cases, he said, servers get stiffed.

Automatic gratuities are acceptable, as long as the restaurant operator tells customers about it, said Diane Gottsman, owner of the Protocol School of Texas, a consulting company that specializes in business etiquette and executive training. "The restaurant is not trying to trick you," she said. "They are protecting servers who are working for less" than minimum wage.

If an auto-tip is added, "you cannot leave less," Gottsman said. Even if the experience is terrible, gratuity is often shared among many workers – from kitchen staff to busboys – who might have done their jobs well. Instead, she suggested that unhappy customers speak to a manager, who can decide how to compensate them.

Tipping protocol has changed over time. The standard 15 percent gratuity has edged up to 18 percent, and 20 percent for above-and-beyond service. And while the Emily Post Institute website, representing the venerable etiquette maven, still advises applying a gratuity on the meal total before tax is added, most diners today tip on the final bill amount.

It's also more common today for consumers to tip for counter service or to-go orders. At The Ten Top café in Norfolk, patrons order at the counter and take their food to go or to one of the few tables. A bowl up front accepts their extra cash for the staff.

If they pay with a credit card, they will see a screen pop up on the iPad payment system with the suggestion to add 10, 15 or 20 percent to the tab. They can bypass those options and add their own or no gratuity.

The Ten Top's owner, Rick Fraley, said he subscribes to the notion that the word tips stands for "to insure prompt service" (though many sources dismiss that acronym as a myth).

The counter staff delivers orders to tables or bags them to go, Fraley pointed out. They bring water to diners on request and must clean up after them. All that deserves some monetary recognition, he said. He pays his counter staff $4.50 an hour, a below-minimum-wage rate that the IRS allows for workers who receive tips.


9 Iconic Brands That Could Soon Be Dead

Did you know that Volvo is struggling to sell cars in America? Or that the sandwich chain Quiznos is in serious debt? Below are nine surprising companies that could actually be on the verge of dying. If they don't reshape their business models, you just might have to say goodbye to these big brand names sometime soon.

What set them apart: "Mmm. toasty." Toasted sandwiches. Founded in 1981, founder Jimmy Lambatos claimed what set Quiznos' sandwiches apart from others was that they toasted each and every one, because "heating anything brings out the flavors in food products."

What went wrong: Once every other sandwich chain started toasting their sandwiches, Quiznos just wasn't that unique anymore. Even worse, for a very long time, Quiznos kept its prices well above Subway's, which likely cost them with customers during the recession.

Where they are now: Quiznos has gone down from 5,000 stores at their peak to around 2,100, with hundreds of more locations close to shuttering. The Denver-based chain recently missed payment on a loan and is working to restructure its nearly $600 million dollars in debt.

Who's doing it right: Subway. In 2008, amid a huge recession, Subway surpassed the 30,000-restaurant mark. CEO Fred DeLuca credits Subway's success to their simplicity. "The preparation is mostly done in front of the customer. That simplicity is really what attracts our franchisees," he said. "You see it, and you can do it".

2. JC Penney

A list of all the JC Penney stores that will be closing in 2014

What set them apart: As one of the largest American mid-range department stores, JC Penney seemed to be making all of the right decisions until about four years ago. They were successful with store expansion and kept certain things when other department stores nixed them. For example, when Sears closed its catalog business in 1993, JC Penney became the largest catalog retailer in the United States. Also, by incorporating outside companies within their stores, like Sephora and Seattle's Best Coffee, JC Penney offered a diverse customer experience.

What went wrong: But by adding companies within their stores, JC Penney also lost its identity. They moved away from their target customer, the middle-income American, and started trying to appeal to a higher-income clientele. Unfortunately, their customer base wasn't interested in shelling out the money to get their nails done at a JC Penney.

Where they are now: In an effort to get back to the path of profitability, JC Penney recently announced they would be closing 33 stores and cutting 2,000 jobs.

Who's doing it right: Macy's. Although they also cut 2,500 jobs this year, the successful department store did so in order to maintain their current profit margins and to avoid the problems JC Penney is currently facing. It also doesn't hurt that Macy's has established itself as a permanent fixture of American pop culture, with the Macy's Thanksgiving Day Parade and its annual Fourth of July fireworks event.

What set them apart: Founded in 2007, gaming company Zynga was at one point worth around $20 billion. They launched one of the most popular social networking games ever: FarmVille. It was one of the most popular Facebook games for months, but as of January 2014, FarmVille is ranked as the 45th most popular Facebook game.

What went wrong: In March 2012, Zynga experienced something of a turning point when it purchased OMGPOP, a gaming company behind the popular mobile game Draw Something. However, a noticeable drop in the game's popularity was seen after the purchase, with daily users dropping from 15 million to 10 million in the first month after the acquisition. Zynga experienced problems beyond bad investments. The company was known to be somewhat rogue and unorthodox: Several employees have spoken out against Zynga's workplace standards and getting stiffed out of stock options. Zynga also relied too heavily on Facebook, and as the social network changed, the company couldn't keep up.

Where they are now: The company hired a new CEO, Don Mattrick, the former head of Microsoft's Xbox business, who has slashed jobs and cut back on outside ventures and collaborations. However, their mobile problems still remain, and unless Mattrick can think of a way to successfully transition Zynga's online gaming platforms onto a mobile setting, the company could be facing some rough waters ahead.

Who's doing it right: Supercell. The Helsinki-based start-up is the highest valued mobile application company in the world. They have huge success with the mobile and tablet games, Clash of Clans and Hay Day. Their success could be because gaming is about as popular in Finland as it is in the United States, but players in Finland play more on their mobile devices. Also, it doesn't hurt that Finland has the world's highest proportion of people employed in technology.

4. Red Lobster

What set them apart: Red Lobster is still one of the only and definitely the biggest American casual dining restaurant dedicated to seafood. Also: Cheddar Biscuits. The restaurant always serves a basket of these garlic cheese biscuits as you wait for your seafood, and they have developed a huge fan following.

What went wrong: The problem isn't only with Red Lobster: Many sit-down restaurant chains seem to be doing poorly lately. Ruby Tuesday recently announced it was closing 30 of its restaurants. While most of these companies are blaming poor sales on the bad economy, the problem also lies in the fact that the economy has given birth to a variety of new and different fast-casual dining establishments. Many of these places also don't require waiter service. Restaurants like Panera Bread and Smashburger, for example, offer the same food prices without having to tip someone for bringing it to your table.

Where they are now: Red Lobster is in the most trouble in terms of fast-casual dining establishments. In December, parent company Darden Restaurants announced that it had intentions to sell Red Lobster or spin it off into its own company. However, Starboard, a big investor in Darden Restaurants, announced that they feel the company's decision to sell or spin off Red Lobster wasn't a good idea. They wrote a letter to Darden urging them to consider other options, such as improving operations and cutting company costs nationwide. "We believe a separation of Red Lobster as currently conceived could destroy substantial value," Starboard managing member Jeffrey Smith wrote in the letter.

Who's doing it right: Chili's. While this company isn't necessarily doing well, they have recently added delivery service to help boost sales. However, their delivery method is a novel and risky approach. They are only offering delivery for orders that are over $125 and they are asking employees to use their own cars for delivery to cut costs.

5. BlackBerry

What set them apart: It wasn't called a "Crackberry" back in 2007 for nothing. Right before the iPhone was announced, BlackBerry phones were the most popular mobile devices on the market. They truly dominated in the "cool" factor, with every celebrity owning one.

What went wrong: Two new phones appeared: iPhones and Droids, a popular line of phones that helped popularize Google's Android operating system. These revolutionary touchscreen smartphones turned the Blackberry into a stale and antiquated device. BlackBerry thought that their phone with a keyboard would still attract more professional and business-oriented people, but they were mistaken. Most people, regardless of whether they used their phone for business or pleasure, switched over to the iPhone or the Android-operated smartphones and BlackBerry seriously lost its momentum.

Where they are now: In January 2013, BlackBerry released its latest device -- a touchscreen smartphone. Even with popular integrated apps, the product failed to take off. Their sales have crumbled, and in September 2013, the company pre-announced second quarter earnings, reporting that they'd missed estimates by nearly 50 percent. They also announced they were cutting 4,500 workers and getting out of the consumer business, sparking up rumors that they would merge or sell the company. Recent reports suggested that the Department of Defense had offered BlackBerry some much needed good news, however, with plans to buy 80,000 of the company's devices, though the DOD later denied that any new orders had been placed and that the confusion had been over an earlier existing order.

Who's doing it right: Samsung. The creators of the popular Galaxy smartphone have risen to the top of the mobile game, due to the simplicity of their phone. In October 2013, Samsung beat Apple as the most profitable smartphone company in the Global Brand Simplicity Index 2013. The index measures the ease that consumers have with different brands, based on the simplicity or complexity of their “products, services, interactions and communications in relation to industry peers.”

What set them apart: This one's pretty obvious: Professional women's basketball. The Women's National Basketball Association was founded in 1996, comprised of 12 teams designed to be a counterpoint to the National Basketball Association (NBA).

What went wrong: Unfortunately, the public just isn't that interested in professional women's basketball. The league, which once had as many as 16 teams, has since been downsized to 12. Attendance at the games has also been horrible, with average regular season attendance per game at only 7,457 in 2012, compared to about 18,000 for the NBA. In 2013, the attendance rate improved by three percent.

Where they are now: David Stern, the protector of the WNBA, will retire in February. As the commissioner of the NBA for the past three decades, he has been a strong supporter of keeping the WNBA afloat. Without him, it's unsure how the association will fare financially.

Who's doing it right: The Ladies Professional Golf Association (LPGA). Founded in 1950, the LPGA is the longest running women's professional sports association. Perhaps this is due to the higher prevalence and knack for female golfers to develop a "celebrity status."

What set them apart: How many parents have relied on Volvos to protect their precious and inexperienced teenaged drivers? Volvo was long thought of as the typical safe and approachable vehicle, once packing high school parking lots.

What went wrong: Volvo competes with way too many car brands. The Swedish manufacturer is in direct competition with mid-luxury cars, like Toyota and General Motors, while also finding itself up against lower-priced high-end cars from Mercedes and BMW. Therefore, the demand for Volvo has suffered.

Where they are now: The company sold a total of 427,840 cars in 2013. Most sales occurred in China, which is predictable, since it has been Chinese-owned for the past three years. Sales were lackluster in its primary markets: Europe and the United States.

Who's doing it right: Volkswagen. One of Volvo's biggest problems seems to be their small selection of car choices and types. Volkswagen owns Audi, Porsche, Skoda and Seat car brands. This allows for a company with a diverse and large audience -- they can market their cars to people of all financial levels. In 2013, VW delivered a record 9.5 million cars and commercial vehicles, a 4.8 increase in sales.

8. Martha Stewart Living Magazine

What set them apart: Lifestyle personality Martha Stewart is extremely popular, so it only makes sense that her magazine and television show, both of which started in the early 1990's, would resonate very well with the American public.

What went wrong: Martha Stewart Living Magazine can't sell advertising pages at all. According to the Media Industry Newsletter, the magazine’s advertising pages fell from 1,306 in 2008 to 766 in 2012.

Where it is now: In the past five years up to the end of 2012, Martha Stewart Living's publishing revenue fell from $179.1 million to $122.5 million. It lost $62 million from 2012 to 2013, and its publishing revenue dipped to $19.4 million, from $27.6 million. They have had to discontinue two of their smaller magazines: Everyday Food and Whole Living.

Who's doing it right: Playboy. Since Martha Stewart Living Omnimedia is undergoing a huge restructuring from a media company to a merchandising enterprise, the major transition could make shareholders uneasy. New York Times writer David Carr has suggested taking a hint from a different kind of major lifestyle brand, Playboy, and making the switch from being a public company to a private one.

9. Abercrombie & Fitch

What set them apart: About ten years ago, Abercrombie & Fitch was all the rage among preteens and teenagers. It was founded in 1892 in Manhattan and started out as a luxury sporting and excursion goods brand. In the early 1990s, the company re-shifted to target the 18- to 22-year-old group who aspired to wear popular "casual luxury" clothing. They succeeded immensely and created three offshoot brands: Abercrombie Kids, Hollister and Gilly Hicks. (A fourth, short-lived spinoff, Ruehl No. 925, offered upscale outerwear and accessories between 2004 and 2010.)

What went wrong: Abercrombie & Fitch failed to realize that teens' values have shifted from the 90's to present day. Instead of wanting to fit the mold, Ashley Lutz at Business Insider says teens today want to be unique and not look like everyone else. Also, in today's economy, a lot of American parents find Abercrombie & Fitch's clothing to be too expensive. And, after all, they are often the ones footing the bill in this case.

Where they are now: The company’s stock has underperformed in the S&P 500 over the last five years and is down 30 percent in the past year. It also has been voted as one of "The Most Hated Companies in America" by 24/7 Wallstreet.

Who's doing it right: Urban Outfitters. While Abercrombie & Fitch and Urban Outfitters have both recently been criticized for over-characterizing their customers, Urban Outfitters offers enough diverse items to succeed. Also, Urban Outfitters gets a quarter of its revenue from e-commerce sales, far exceeding Abercrombie & Fitch's internet success.

CORRECTION: An earlier version of this story incorrectly stated that the WNBA had been downsized to six teams. It currently has 12, after having as many as 16. It also misstated the year that Abercrombie & Fitch was founded as 1893 it was the previous year.

This article has been updated to include additional information about Abercrombie and recent developments in Blackberry's relationship with DOD.


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Workers at Olive Garden, related chains to get pay raise, bonus

(AP) - The company that runs the Olive Garden chain is raising pay for its workers and handing out one-time bonuses, a sign of optimism from the kind of casual sit-down restaurant that has been devastated by the pandemic.

Darden Restaurants said Thursday that every hourly restaurant worker will earn at least $10 per hour including tips as of Monday. That will rise to $11 per hour in 2022 and $12 per hour in 2023.

Darden, which also runs LongHorn Steakhouse, Cheddar’s Scratch Kitchen and other chains, said it will spend an additional $17 million one-time bonuses for its nearly 90,000 hourly employees. Workers will receive between $100 and $300 depending on how many hours they work each week.

The company on Thursday reported a surprisingly strong quarter and the pay hikes signal both confidence about an economic recovery and potentially increased competition for workers as the U.S. emerges from the pandemic.

A year ago this month, Darden closed all of its dining rooms. Casual dining chains were especially hard hit because unlike pizza places or fast foot chains, they had neither drive up windows nor well-established delivery service to offset the loss of business due to pandemic restrictions.

At one point, same-store sales at Darden, a key reading in retail for the health of a company, plunged 75%.

About 99% of Darden’s dining rooms have since re-opened with at least partial capacity. The rapid vaccine rollout and stimulus checks are fueling sales this year. For the week ending March 21, same-store sales for the Orlando, Florida, company rose 5% compared with the same period in 2019.

About a third of Darden’s sales still come from carryout orders, but the company expects that to shift back to the dining room as more people are vaccinated and the economy recovers.

“It’s getting to a point where, you know, I think we’re cautiously optimistic and excited about what’s going to transpire here over the next few months, maybe few years,” said CEO Eugene Lee during a call with industry analysts Thursday.

In the fiscal third quarter, which ended Feb. 28, Darden’s sales fell 26% to $1.73 billion, better than the $1.6 billion Wall Street had expected, according to FactSet.

The company’s net income fell 44% to $128.7 million, or 98 cents per share. That easily beat the 70 cents analysts had forecast.

Darden shares jumped almost 5% Thursday, the largest percentage gainer on the S&P 500, and it led the entire consumer discretionary sector higher.

Darden said its average hourly worker already makes $17 per hour. But some currently make the federal minimum wage of $7.25 per hour, so the raise will ensure that all workers make at least $10 per hour.

“Continuing to attract and retain the best talent in the industry will be critical to our success,” Lee said in a letter to employees.


Free breadsticks and reasons for hope at Olive Garden

FILE - This June 27, 2016 file photo shows an Olive Garden restaurant in Methuen, Mass. Darden Restaurants says every hourly employee will earn at least $10 per hour including tips starting March 29, 2021. That will rise to $12 per hour in 2023. Orlando, Florida-based Darden, which also owns LongHorn Steakhouse, Cheddars Scratch Kitchen and others, is also giving one-time bonuses of up to $300 to nearly 90,000 hourly employees. (AP Photo/Elise Amendola, File)

The company that runs the Olive Garden chain is raising pay for its workers and handing out one-time bonuses, a sign of optimism from the kind of casual sit-down restaurant that has been devastated by the pandemic.

Darden Restaurants said Thursday that every hourly restaurant worker will earn at least $10 per hour including tips as of Monday. That will rise to $11 per hour in 2022 and $12 per hour in 2023.

Darden, which also runs LongHorn Steakhouse, Cheddar’s Scratch Kitchen and other chains, said it will spend an additional $17 million one-time bonuses for its nearly 90,000 hourly employees. Workers will receive between $100 and $300 depending on how many hours they work each week.

The company on Thursday reported a surprisingly strong quarter and the pay hikes signal both confidence about an economic recovery and potentially increased competition for workers as the U.S. emerges from the pandemic.

A year ago this month, Darden closed all of its dining rooms. Casual dining chains were especially hard hit because unlike pizza places or fast foot chains, they had neither drive up windows nor well-established delivery service to offset the loss of business due to pandemic restrictions.

At one point, same-store sales at Darden, a key reading in retail for the health of a company, plunged 75%.

About 99% of Darden's dining rooms have since re-opened with at least partial capacity. The rapid vaccine rollout and stimulus checks are fueling sales this year. For the week ending March 21, same-store sales for the Orlando, Florida, company rose 5% compared with the same period in 2019.

About a third of Darden's sales still come from carryout orders, but the company expects that to shift back to the dining room as more people are vaccinated and the economy recovers.

“It’s getting to a point where, you know, I think we’re cautiously optimistic and excited about what’s going to transpire here over the next few months, maybe few years,” said CEO Eugene Lee during a call with industry analysts Thursday.

In the fiscal third quarter, which ended Feb. 28, Darden’s sales fell 26% to $1.73 billion, better than the $1.6 billion Wall Street had expected, according to FactSet.

The company’s net income fell 44% to $128.7 million, or 98 cents per share. That easily beat the 70 cents analysts had forecast.

Darden shares jumped almost 5% Thursday, the largest percentage gainer on the S&P 500, and it led the entire consumer discretionary sector higher.

Darden said its average hourly worker already makes $17 per hour. But some currently make the federal minimum wage of $7.25 per hour, so the raise will ensure that all workers make at least $10 per hour.

“Continuing to attract and retain the best talent in the industry will be critical to our success,” Lee said in a letter to employees.

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Restaurants Across the Country Struggle to Respond to Coronavirus

Cancellations, closings and a thinning out of tables may be just the beginning for a business based on social contact.

Restaurants across America are scrambling to respond to fast-moving developments as the coronavirus spreads.

In New York State, bars and restaurants learned Thursday that they would have to cut the number of customers they serve by half starting Friday, to provide more room between tables, under an order from Gov. Andrew M. Cuomo. Tom Douglas, one of Seattle’s most prolific restaurateurs, announced Wednesday that he would close 12 of his 13 restaurants for at least two months after the virus had wiped out up to 90 percent of his traffic.

According to figures from Resy, a national reservation platform for high-end restaurants, business on Wednesday night was down by 20 percent across the United States from a year ago, by 30 percent in New York City and by as much as 60 percent in Seattle. New York’s cancellation rate was 45 percent higher than normal.

“We are in crisis mode,” said Rocky Cirino, managing director of Altamarea Group, which has 10 restaurants, five in New York and the others in New Jersey, Washington, Dubai and Istanbul. “Drastic layoffs may be inevitable. Restaurants are a voluntary gathering place for meetings, for celebrations, for general revelry, for shared sustenance. None of those things will be happening.”

Even in cities like Atlanta, where the number of reported coronavirus cases is relatively low, the pandemic has restaurant owners struggling to keep up with canceled reservations and public fears.

“Like everyone, we are getting prepared for the very worst,” said Steven Satterfield, the chef and an owner of Miller Union, which is formulating a plan to reduce the number of tables to create more space around them in what is becoming known as “social distancing,” and to bring takeout food out to customers’ cars.

Across the country, restaurants are stepping up efforts to streamline operations, designing menu items that can be more easily delivered and doubling down on cleaning, all with an eye on revenues that are shrinking faster than ice cream in July.

“Every few hours, someone walks into the restaurant and says, ‘Did you hear this closed?’ ” said Mark Canlis, an owner of Canlis, a well-regarded Seattle fine-dining restaurant where business was down by half last week compared with last year at this time, and has continued to fall.

No restaurant community has felt the crisis more acutely so far than Seattle’s. Washington State has the country’s highest number of reported coronavirus cases and deaths, concentrated largely in the Seattle area.

“I feel like we’ve been one headline away from closing down,” Mr. Canlis said.

To fight back, he said the restaurant would reinvent itself starting Monday. Instead of multicourse dinners, Canlis will serve bagels from an outdoor stand at breakfast and hamburgers for lunch. The hamburgers will be available for drive-through pickup. In the evening, the restaurant will offer home delivery of prepared meals.

In New York and other cities, Chinese restaurants are suffering disproportionately, and restaurant operators say they face race-based fear. “Because we’re Malaysian and it’s not, like, blatantly Chinese, that kind of saved our butts a little bit,” said Moonlynn Tsai, an owner of Kopitiam on the Lower East Side, not far from New York’s Chinatown.

“It’s so sad,” she said. “These are the restaurants that have been there for decades.”

Most unnerving, many restaurant owners and chefs interviewed Thursday said, is the speed with which the downturn came and the uncertainty over when it might end.

“With the volatility in the stock market, extreme germophobia and basically no one traveling, we have to hunker down and prepare for an 80 percent decline in business,” said Alex Stupak, the chef and an owner of the Empellón restaurants in New York.

Just a day before Governor Cuomo ordered all venues that seat 500 people or fewer to operate at half capacity, Mayor Bill de Blasio urged New Yorkers to continue to eat at restaurants, and emphasized that the virus isn’t transmitted through food and drinks.

What to Cook This Weekend

Sam Sifton has menu suggestions for the weekend. There are thousands of ideas for what to cook waiting for you on New York Times Cooking.

    • Gabrielle Hamilton’s ranchero sauce is great for huevos rancheros, or poach shrimp or cubed swordfish in it.
    • If you’re planning to grill, consider grilled chicken skewers with tarragon and yogurt. Also this grilled eggplant salad.
    • Or how about a simple hot-dog party, with toppings and condiments galore?
    • These are good days to make a simple strawberry tart, the blueberry cobbler from Chez Panisse, or apricot bread pudding.
    • If you have some morels, try this shockingly good pan-roasted chicken in cream sauce from the chef Angie Mar.

    “It’s complicated messaging,” said Mitchell Davis, the chief strategy officer of the James Beard Foundation, which announced Thursday that it was postponing its annual suite of spring culinary awards events in New York and Chicago until the summer. The organization has also canceled some upcoming events at the James Beard House in Manhattan, and is working on a set of health and safety protocols to distribute to restaurants.

    “The biggest challenge we feel is how to be supportive of the industry, which is facing very real challenges, but be responsible when we are saying to people, ‘Go eat at restaurants,’ ” he said.

    Without any clear guidelines and guest counts sliding each day, restaurants both big and small are trying to do what they can. Many are sending customers newsletters suggesting delivery or takeout options and emails about sanitation measures. Buffets are being replaced with à la carte items line cooks are using more utensils and gloved hands to finish dishes and communal silverware containers are being shelved. Booths and tables are being thoroughly wiped down between guests.

    At Automatic Seafood and Oysters in Alabama, one of the few states that hasn’t had a verified coronavirus case, walk-in traffic has slowed, although reservations have not. But the staff is trying to prepare for what’s coming, and do what they can to protect public health.

    “We are wiping down the telephones, the computer keyboards, the bathroom door handles — anything staff would touch in the back we are now very O.C.D. about,” said Suzanne Humphries, who owns the Birmingham restaurant with her husband, the chef Adam Evans. “We’re thinking of our guests, of course, but thinking of what changes we can do to protect everyone internally.”

    That might even mean taking the temperature of every staff member before a shift starts. “It’s scary to think about, but we have to think outside the box,” Mr. Evans said.

    Many hope the removal of tables and bar stools in the name of social distancing will make dining out an attractive option despite the pandemic.

    At Plumed Horse, a Michelin-starred restaurant in Saratoga, Calif., that is a favorite among the Silicon Valley executives at Apple and Google, half the tables have been removed to allow at least six feet between them. The restaurant now has only 20 tables, said Joshua Weeks, a co-owner. When corporations began banning travel last week, he saw 1,100 cancellations in 72 hours. That number has leveled off, he said.

    There is also the question of how much and what to tell customers. Some restaurants are sending email blasts, like one from Bocca di Bacco in New York that assured diners that it is sanitizing its three restaurants frequently, and urging both customers and employees who feel ill to stay home.

    Melany Robinson, owner of the Sprouthouse public relations agency, had fielded so many panicked calls from many of the 55 hospitality clients she represents that she put together a template outlining sanitation and cleanliness standards and sick policies for them to send out.

    “People were asking me what to say when the elderly customer calls up and says we want to go out to dinner tonight but we have some questions,” she said.

    Fewer customers also means less work, and restaurants are having to cut hours and lay people off.

    On Thursday in Juneau, Alaska, Beau Schooler, the chef and owner of In Bocca Al Lupo was processing the news that several major cruise companies would suspend operations for the next two months.

    Alaska’s capital city, population 32,000, isn’t accessible by roads, and the economy depends on cruise ships. On a busy day at the docks, 20,000 tourists might arrive. Like business owners in many small towns along the cruise route in Alaska’s panhandle, Mr. Schooler depends on the summer rush to float the winter season. It allows him to keep his staff year-round and to stay open for locals in the wintertime.

    Major companies like Darden Restaurants, which operates chains including the Olive Garden and Longhorn Steakhouse, have announced they would offer up to seven paid sick days to hourly workers, but smaller restaurants can’t necessarily afford to.

    Natalie Freihon, the managing partner of Silkstone Hospitality, reported a 40 percent drop in business from last year at the Fat Radish in New York’s Chinatown and a 30 percent drop in dinner business at the Orchard Townhouse in Chelsea. She is paying sick leave to workers, but has had to negotiate with landlords at both restaurants to defer April rent and pay in weekly installments to help her cash flow. She has also negotiated with her loan brokers to buy some time.

    “We really need people to spend money,” she said. “Even if they just go on our websites and buy gift cards. Any revenue will help us during this time.”

    The chef Hugh Acheson, who has restaurants in Atlanta and Athens, Ga., said he is worried about meeting payroll for the next two weeks. Even if business picks up, the damage could be long-lasting. “Who knows when we’ll be back to full throttle? And full throttle in this business is low at best,” he said. “We don’t have the cushion other businesses do.”

    At Commander’s Palace in New Orleans, most of the cancellations have been for private parties with large groups, but Ti Martin, whose family started the restaurant, sees more coming.

    “This feels like the beginning of a real, real long wait for a hurricane,” she said. “We’re just not going to lose power. When we get into stuff like this, I call it entrepreneurial terror.”

    Reporting was contributed by Amelia Nierenberg, Tejal Rao, Brett Anderson and Julia O’Malley.