Darden on Casual Dining and the Future of Chain Restaurants (DRI 1Q06 Conf Call Quotes)

Darden Restaurants (ticker: DRI) which operates casual dining restaurants in the US and Canada including Red Lobster, Olive Garden, Bahama Breeze, Smokey Bones, and Seasons 52 reported Q1 2006 earnings results last week. CEO Clarence Otis and President Drew Madsen had the following to say about the casual dining industry and the future of chain restaurants during management's earnings results conference call:

On Casual Dining

....one insight I would add to the point that Clarence made about casual dining holding up better than other parts of the restaurant industry, the insight is that casual dining really satisfies fundamental emotional needs better than other parts of the restaurant industry where people want to slow down and relax and reconnect and be with family and friends and our restaurants offer a tremendous environment to do that in. And the more trusted your brand is, as Clarence said, the more it is going to be sought out during challenging times. And we have seen that time and again in the past.

On Chain and Independent Restaurants

....what we're seeing is on a total basis kind of flattish on the unit growth side and both independents and chains being a little flat and that's a change because independents had been negative for well. Chains had been a little bit positive. We still see chains as we look out in the future taking more share and we think that the unit growth will be pretty well contained but that's still means a few more seats if you look at it on a seat basis because chains tend to build somewhat bigger restaurants.

(Quotes are from the CCBN StreetEvents transcript.)

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