Paul Meisel

Darden's Rising Labor Costs Cause For Concern

I should have thought of this at the time -- a club manager friend reminded me that staff have no choice but to report the tips charged on plastic -- and the percentage of these is both trending up over time, and is larger at upper end establishments.

So the long-term trend towards reporting more tips is probably unavoidable for the mid and upper end chains.

Darden's Rising Labor Costs Cause For Concern

She also mentioned earlier in the call that a portion of the increase was due to higher mix of Olive Garden sales, their highest labor cost franchise. Having eaten in all of their chains, I understand this -- the level of service and presentation of food is better there.

I find it interesting that there is a higher level of tip reporting. Typically wait staff don't report more than they have to.... I wonder what mechanism is at work there, possibly that tips are up so that there is more reporting while skimming about the same portion? Or something else?