Olive Garden, part of the Darden Restaurants portfolio, started offering delivery during the pandemic.

Olive Garden / Facebook

Off-Premise Boom Won’t Last After Pandemic, Says CEO of Darden Restaurants

Gene Lee said the current demand for delivery and takeout isn't as "sticky" as many in the restaurant industry believe.

  • Darden Restaurants CEO Gene Lee said customers want to go back to dining in at restaurants rather than eating at home.
  • Darden also expressed doubts about the prospects of new-to-the-market virtual brands using ghost kitchens and third-party delivery.
  • Marco’s Pizza is looking to expand to ghost kitchens in certain markets but will operate them under the Marco’s name.

Related: How leading pizza chains handle delivery and carryout

The leader of Darden Restaurants, which owns Olive Garden and LongHorn Steakhouse, believes the demand for off-premise restaurant food will likely decline after the pandemic passes, Nation’s Restaurant News reports.

“I don’t think it’s as sticky as everybody thinks it’s going to be,” said Darden’s CEO Gene Lee in a session at the annual ICR Conference, which runs this week through January 14.

Asked about the proliferation of virtual restaurant brands with delivery-only models and ghost kitchens, Lee believes customers have other interests. “The consumer is telling us more and more they want to get back inside a restaurant,” he said. “They are tired of eating restaurant food in their homes. They want to get back out and socialize with their friends.”

Darden won’t likely create its own virtual brands, Lee said at the conference, according to NRN. “I think brands matter. You just can’t create a brand out of thin air and compete as effectively against a brand that has 30 years of history, that’s been spending $150 million in advertising.”

Related: 12 trends that will impact the restaurant industry in 2021

As PMQ has reported, CEC Entertainment, parent company of Chuck E. Cheese, launched one of the better known virtual pizza brands last year, Pasqually’s Pizza and Wings. Pasqually’s shares kitchen space with Chuck E. Cheese stores and uses the same crust.

Other established chains, such as Marco’s Pizza, are considering expanding to delivery-only outlets, but these operations would likely capitalize on the existing brand’s name rather than move to a virtual-brand model with a new name. “These virtual or ghost kitchens are all about efficiency in a shared kitchen space, which also allows us to easily use third-party delivery drivers and provide a quick-to-open format,” said Ron Stilwell, Marco’s vice president and chief development officer, in PMQ’s Pizza Power Report in December.

Although he thinks the on-premise boom will wane after the pandemic, Lee said Darden’s restaurants will continue to offer curbside delivery, and new restaurants will be designed with parking closer to the kitchen so to-go food won’t have to be carried through the dining room.