Darden Restaurant Financial Analysis

Costco Wholesale Corporation is the U.S. public corporation that I chose to do my Accounting 2 project on.

LongHorn Steakhouse is a family-friendly location focusing on legendary steak done right. Guests can stop in for lunch and choose from more than 30 combinations that are sure to satisfy. Bring the entire family in for dinner, or enjoy an intimate date night with drinks from the full bar.

Dillard 's, Inc. has established retail department stores located mostly in the Southern and Midwestern regions of the United States. The Organization offers name brand and private-label merchandise, including fashion apparel and home furnishings. SIC Code 5311(Dillard’s)- This category includes retail stores carrying a general line of apparel, from men’s suits, outer ware, women’s clothing, casual ware and home furnishings, such as furniture, home decor, towels or linens, and major household appliances; and housewares, such as home appliances, dishes, and utensils all of must be sold to classify for proper coding. NAICS Code- 452110 (Dillard’s) - These products and other merchandise has specific departments with the accounting on a departmentalized basis. A single management team oversees the work functions of these departments and has an average above 51 staff members. The stores have their own charge accounts, deliver merchandise, and maintain open stocks. Since the recession, Dillard’s has decreased the amount of storefronts within the market and has moved into the discount store market to attempt to capitalize on the lower range of income households. Because of this change in strategy and decrease in profit margins economist have stated the life-cycle stage is close to the end and the competitive outlook for Dillard’s is very vulnerable.

While it was foreseen that the company would initially take financial setbacks because of the reorganization, it was not believed that the financial risks would be drastic. However, the impending report that Mr. Elesser has to present to the board will detail a net income that will be nearly 26 million dollars in the red for 2004 (see exhibit 2)3. The blunt force restructuring met resistance on numerous fronts. First of all, the various components of the company did not operate under the same uniformed leadership objectives. Each division was set up to look out for their own interests and markets. When the restructuring plan that focused on a more centralized management process, many of the things that worked for one division did not necessarily work for other divisions of the company. This left some divisions at a severe disadvantage. Another obstacle that worked against the restructuring was the employee unions in which the company had to deal. The unions were not on board with the various downsizing and restructuring methods. In addition, the company had to deal with a couple of different unions which posed a problem with negotiating tactics. Benefit costs were also a significant investment that did not hold up well under the auspice of restructuring.

The company has been franchising since 1997 and currently has over 600 restaurants across the globe. Many celebrities such as Rick Ro$$ and

* They are a subsidiary of Cara. Cara is one of the largest operators of full-service restaurants in

Aldaco's Mexican Cuisine serves up tasty fare. Owner Blanca Aldaco is proud to offer guests to the restaurant traditional dishes prepared from scratch with family recipes and great service. Aldaco's has a casual atmosphere and spacious seating. It serves appetizers like queso and chips, jalapeño rellenos and chalupas. Guests can chow down on a fulfilling entrée of shrimp fajitas served with house-made tortillas, tilapia tacos topped with a cabbage slaw or a combination platter with marinated skirt steak with poblanos and a grilled chicken breast. This restaurant also has gluten-free options, burgers and soup.

Given the changes in Red Lobster’s strategy over the past few years and the surprising ability to attract new, “experiential” customers, it our recommendation that they modify their strategy to focus on pursuing this type of clientele. We will go into further detail momentarily; however, the reason for focusing on the experiential customer group is that Red Lobster has the opportunity to increase revenue and net operating income at each restaurant by 20% or more. Granted, these are enormous gains and it will take a few years to realize their full potential, but for the reasons laid out below, we believe these gains are a realistic possibility.

Darden Restaurants owns a number of specialty brands that are located throughout the United States and Canada. These include: the Olive Garden, Red Lobster, LongHorn Steakhouse, the Capital Grille, Bahama Breeze, Seasons 52, Eddie V's Prime Seafood and Wildfish Seafood Grille. The company has 2 thousand locations and they employ 135 thousand people. Their primary markets are middle class to affluent families. ("Our Company," 2012)

Moreover, there is strong conflict of interest between the company and its wholesalers since Daloon is also maintaining direct contact with the target groups within the catering market. The fact that Daloon's products constitute only a small portion of the wholesalers' catalogue makes it more pressing for the company to exert extra effort for the wholesalers to promote and distribute its products.

The past few years have been a time of great activity and change for the Wendy's/Arby's Group, in large part because the group only formed with the merger of Wendy's and the parent company of the Arby's brand, Triarc, in 2008 (Wendy's/Arby's Group, 2011). The company's restaurants operate primarily on a franchise basis, and other than buns and toys for children's meals the company does not typically sell or otherwise provide food or other supplies to these franchise restaurants, but rather franchises and franchise groups are required to contract for their own supplies and food items (Wendy's/Arby's Group, 2010). For a period during the 2010 fiscal year, however, Wendy's franchise restaurants were supplied with a substantial amount of their food and other supplies, partially on a trial basis to see if a more extensive company-to-franchise supply company would be beneficial to any or all parties concerned, and partially to fill an identified need for supply chain intervention for some franchise groups (Wendy's/Arby's Group, 2010). This necessarily has an impact on the costs at the company, with several

Multi-unit Restaurant Business concepts are represented by units with independent operators. The concepts are categorized into three industry segments 1) specialty establishments, 2) quick service restaurants, and 3) casual dining. An excellent example of this concept business is The Darden family of restaurants, founded from Lakeland, FL, which features the following most successful and recognizable brands in full- service dining: Red Lobster, Olive Garden, Long Horn Steakhouse, Bahama Breeze, Seasons 52, The Capital Grille, Eddie V’s, and Yard House. According to their last SEC 10-k report filing, they own and operate worldwide more than 2,000 restaurants, employ 185,000 people, and serve more than 423 million meals a year. The

Darden takes its suppliers very seriously, prior to doing business, the supplier must be qualified and a Total Quality Management Team assigned to that vendor. Product tracking occurs with inspection teams that identify the lot ID, atmospheric packaging, and the ability to track the order from origin to receipt of goods. For their many restaurants, Darden structures its supplies from 5 continents and thousands of suppliers, but insists on independent and accurate assessments in order to maintain relationships. Everything must be JIT inventory except smallware.

1. Darden Restaurants segments the sit down dining market by creating the idea of “casual dining” and having three different chains of restaurants that aim to serve a specific group of consumers. Darden has taken the total market of those who go to eat out and broken it down to a smaller segment of people who do not want to go to a fancy restaurant, but at the same time want something more than fast food. This segmentation is also known as demographic segmentation. Demographic segmentation is when a market is divided up based on the age, gender, income, ethnicity, etc. Darden recognized the demographics (primarily their income, age, and generation) of the people that would be coming to eat at their restaurants, so that they are better able to cater to them. The CEO of Darden, Clarence Otis, once stated that “the direction of

When we look at the official website of CDC, we can discover that CDC has many experience of operating new restaurant. For example, espressamente illy is a joint venture with illycaffé S.P.A. in 2007 and Oliver 's Super Sandwiches is acquired in 2003