Darden Restaurants(US:DRI) CNBCยท2024-06-20 15:03Core Insights - The casual dining sector is experiencing a shift in consumer preference from quick-service restaurants, with Darden's CEO noting that casual dining chains are gaining customers frustrated with fast-food prices [1][7]. Company Performance - Darden's shares rose over 1% in morning trading, although the company's stock has fallen 6% this year due to concerns about the consumer environment [3]. - In its fiscal fourth quarter, Darden reported flat same-store sales growth and weaker-than-expected revenue, but its earnings exceeded Wall Street estimates [6]. Competitive Landscape - Competitors like Brinker International (Chili's) and Dine Brands (Applebee's) are actively targeting fast-food customers, with Chili's launching an ad campaign highlighting the prices of fast-food items [4]. - Darden has adopted a strategy of lower pricing than inflation and increased television advertising to attract diners [6]. Pricing Trends - Full-service restaurant menu prices increased by 3.5% over the last 12 months, while limited-service eateries saw a 4.5% increase, with the overall consumer price index rising by 3.3% during the same period [8]. - McDonald's has faced criticism for its pricing, claiming a 40% increase since 2019, and has introduced a new $5 value meal to appeal to price-sensitive customers [2][9]. Consumer Behavior - Consumers are feeling the impact of over two years of price hikes, leading to a shift towards casual dining as they seek better value and overall experience compared to fast-food options [5][10].