‘Olive Garden’ Company Sees Steep Sales Drop After Fighting Obamacare

Darden Restaurants, the company that owns the Red Lobster and Olive Garden chains, saw its net income plunge by 37% in the wake of bad publicity about its policies regarding the Affordable Care Act, also known as Obamacare. According to the Associated Press, “revamped menus and new ad campaigns” fell flat as the corporate giant failed to attract more diners.

Darden issued a profit warning on Dec. 4, setting off an overall decline in stock value for casual dining restaurants.

According to the AP, “For the period ended Nov. 25, Darden Restaurants Inc. earned $33.6 million, or 26 cents per share. That’s down from $53.7 million, or 40 cents per share, a year ago.”

In its December 4 warning, Darden cited a backlash against its policies regarding the Affordable Care Act (ACA) as part of the reason for the sales slump. In October, the company rolled out a business plan that called for more part-time workers rather than face up to the ACA’s requirement that companies should provide health coverage for all full-time workers.

Red Lobster’s campaign to include more dishes for people who don’t like seafood and a new Olive Garden menu offering lighter and more affordable options both failed to stimulate consumer appetites.

The AP reported that, “revenue at U.S. restaurants open at least a year fell 2.7% for its three biggest chains during the quarter; it fell 3.2% at Olive Garden, 2.7% at Red Lobster and 0.8% at LongHorn Steakhouse. The figure is a key metric because it strips out the impact of newly opened and closed locations.”