Restaurant Chain Bets Pay Off Essay

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Restaurant chain sees recession bets pay off - Success in Hard Times Restaurant chain sees recession bets pay off Olive Garden parent skipped deep discounts in recession By Allison Linn Senior writer updated 10:01 a.m. ET, Thurs., Feb. 25, 2010 At the height of the worst recession in decades, when many casual dining chains began offering deep discounts to lure tightfisted diners, Clarence Otis Jr. resisted. As some rival restaurant chains halted expansion plans or began closing locations, Otis, head of the company that includes Olive Garden and Red Lobster, continued to expand, albeit at a slower pace. And when companies across all industries began plotting major job cuts, Otis opted against such layoffs, although he didn’t necessarily replace every worker who left. As chairman and chief executive of Darden Restaurants, Otis was well aware his company needed to respond to the recession and deep downturn in consumer spending. But he didn’t want to do so in a way that would hurt the brand more than it would help the bottom line. “We’re a very strong brand, and we wanted to make sure that, even as we responded tactically, we didn’t reduce those brands to the point where price was the primary attribute that we reinforced in people’s minds,” Otis said in a recent interview with Now, many of the bets Otis made during the recession appear to be paying off, and Darden is poised to benefit in what many expect will be a slow and difficult economic recovery. “I think he’s doing an excellent job,” said R.J. Hottovy, equity analyst at Morningstar. Otis, 53, whose company owns and operates some 1,800 restaurants across North America, was chosen this month as one of The Grio’s 100, a look at the next generation of African-American leaders and history makers. Short-term benefits, long-term risks Some restaurant chains may have seen a short-term boost

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