Darden, cutting costs isn’t the way to improve business

Tom Dougherty, CEO – Stealing Share

20 September 2013

Cutting costs means you’re failing in other areas

Darden, the restaurant operator that runs Red Lobster, Olive Garden and others, said on Friday it would implement a cost-cutting plan.

“Here is a novel solution. Increase preference for your restaurants by defining who you are and what you do by the prospects you wish to influence.”

Darden Brands

In a nutshell, this is what is wrong with most businesses. Darden sees its profits shrink so it management announces a cost-cutting plan. Don’t blame such craziness on shareholders. Blame it on management.

Here is a novel solution. Increase preference for your restaurants by defining who you are and what you do by the prospects you wish to influence. Not only do will you increase preference, you will also be able to better hold on to margin. Nah. Instead, find ways to cut costs, decrease customer service and cheapen your already bottom feeder foods.

Increasing preference takes smarts, vision and discipline. Darden only knows about discounting.

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