Olive Garden launches bold new offer as restaurant prices surge

Olive Garden is rolling out cost-saving menu changes, and the lower-priced choices can't come fast enough.

Does this sound familiar? I recently went to dinner with my wife and another couple. It was nothing fancy—a casual dine-in brew pub-style eatery. Three of us had salads with protein. The fourth had a fish and chips dinner. Toss in adult beverages, and our bill was over $200, including tip.

5 Biggest U.S. restaurant chains

• Olive Garden
• Applebee's
• Denny's
• Texas Roadhouse
• IHOP
• Source: Market cap by Sales; Euromonitor/Goldman Sachs, Corporate SEC filings.

That's a lot of money -- or at least it feels that way relative to what it may have cost before Covid dealt a sledgehammer to the restaurant industry, forcing closures, and Covid-era stimulus sent inflation skyrocketing.

Average menu prices for food away from home were up 31% between February 2020 and April 2025, according to the Bureau of Labor Statistics inflation data. In September 2025, eating out prices at full-service restaurants rose 4.2% year over year.

Food away from home inflation by year

• 2024: 4.1%
• 2023: 5.8%
• 2022: 7.7%
• 2021: 3.9%
• 2020: 3.4%
• Source: USDA Economic Research Service (ERS) using BLS CPI data.

The high cost of eating out makes Olive Garden's move to expand its menu emblematic of a major problem in the restaurant industry. Visits are flatlining as cash-strapped consumers look for less-pricey alternatives, including dining at home.

So far, Olive Garden's lower-cost menu choices are only available in limited locations. Still, if demand is high (and I suspect it will be), the deals will help boost foot-traffic trends as they spread to many more of its 933 U.S. locations, putting it in a better position to capitalize on an industry that raked in $1.52 trillion in 2024, according to the USDA.

Restaurants are struggling

The failure rate of restaurants is high. According to the Bureau of Labor Statistics, 17% of new restaurants fail in the first year, and about half fail to survive longer than five years.

Those figures make it pretty impressive when a restaurant has so much success that it grows into a nationwide chain that's been around for decades, like Olive Garden, which was founded 42 years ago and now boasts locations in all 50 states.

Still, success isn't guaranteed, as many long-time big restaurant chains have discovered over the past few years. Red Lobster and TGI Fridays declared bankruptcy in 2024, and Friendly's, once boasting over 800 stores, only has four remaining locations. Those are only a few examples—bankruptcy courts are littered with filings of small and mom-and-pop restaurants that have gone under.

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• Beloved soul food restaurant closes after 66 years

It certainly hasn't been barn burner business for the industry. The top 500 restaurant chains posted sales growth of just 3% in 2024, according to Technomic,

"The restaurant industry faced significant headwinds in 2024, including higher prices, shifting consumer spending patterns and increased competition," said Technomic senior director of industry research, Kevin Schimpf.

It hasn't gotten much better in 2025, according to Wall Street.

Bank of America's restaurant analysts recently aggregated the bank's credit and debit card data and discovered that same-store sales growth at independent restaurants "slowed from +5.3% in August to +0.8% in September."

It was worse at restaurant chains, which saw a contraction of -0.9% in August and -1.9% in September.

"We have also grown more cautious [on the industry], given the widening of macro pressures beyond the low-income cohort that had previously been the primary source of pressure," wrote Bank of America in a note to clients shared with TheStreet.

Olive Garden bucks customer trend

Bank of America's findings suggest that belt-tightening is spreading beyond lower-income customers, which is unsurprising given recent layoff and job market data.

The BLS hasn't reported the September unemployment rate because of the shutdown in Washington, DC, but it was 4.3% in August -- the highest since 2021. Meanwhile, Challenger, Gray & Christmas reports that U.S. employers have laid off 946,426 workers this year, up 55% from 2024.

Olive Garden facts at a glance

• Revenue FY2025: $5.2 billion
• Locations: 933 in 50 states.
• Employees: > 99,000
• Source: Olive Garden, Darden Restaurants, Goldman Sachs.

The pressure on consumers has led many to rethink dining out, shifting their spending to venues that give guests more perceived bang for their buck.

Olive Garden has been one of the beneficiaries. Foot traffic to Darden Restaurants (DRI), the company behind Olive Garden and other popular brands, including LongHorn Steakhouse, rose 2.4% in the second quarter, according to Placer.ai data.

Visits have been rising since April, except for a slight dip in June, despite the decline in the overall dining sector.

Placer.ai.

In August, Olive Garden, which accounts for over half of Darden's customer visits, saw visits to locations open at least one year rise a whopping 4.7%—fueled at least partly by the return of the never-ending pasta bowl, which returned at the same $13.99 price point it was when it launched years ago.

"While Olive Garden traffic lagged peers across the casual dining space for the majority of 2024, we saw a strong rebound in calendar year 2025 with observed traffic tracking positive and outpacing the majority of its peers following the return of the brand's Never Ending Pasta Bowl starting at $13.99 (price unchanged vs. 2022 launch of the offer) at the end of August in addition to the ongoing $6 take home pasta offer," wrote Goldman Sachs in a note to clients on Oct. 20.

Olive Garden's growth starkly contrasts Placer.ai's estimate that a -1.8% drop in foot traffic was experienced industrywide at big chains in August.

September was similarly strong, given that Placer.ai gets Olive Garden's traffic up 3.4% year over year in the calendar third quarter.

Olive Garden rolls out value-conscious menu

The success of the never-ending pasta bowl has emboldened Olive Garden to test other value-oriented menu items, leading to its launching a test of many lower-priced choices on menus in 40% of its stores.

The value-priced menu additions include seven choices that are smaller, less-expensive meals.

Olive Garden value-priced meals available in 40% of stores:

• Chicken Parmigiana, $13.99
• Eggplant Parmigiana, $12.99
• Lasagna Classico, $13.99
• Five Cheese Ziti al Forno, $12.99
• Cheese Ravioli, $12.99
• Spaghetti & Meatballs, 13.99
• Fettuccine Alfredo, $12.99

The meals, including unlimited breadsticks and a soup or salad, could help Olive Garden secure even more market share as middle-income consumers, shocked by higher prices (and the resulting increase in tips paid), embrace alternatives.

Olive Garden's target audience has a household income (HHI) of around $75,000. Goldman Sachs points out that, unlike some rivals who skew more toward lower-income levels, Olive Garden isn't as exposed, putting it in a sweet spot for growth despite industry challenges.

"Store zip code analysis in collaboration with GS Data Works suggests that [Darden Restaurants] DRI's key brands have less than 8% exposure to low-income consumers with

In a survey of 2,000 consumers, Goldman Sachs reports that while people expect to lower spending at fast food restaurants over the next three months, spending at casual dining will increase.

"We believe part of the resilience relative to fast food/fast casual comes from its relatively smaller exposure to lower income consumers that have been under more pressure," wrote Goldman Sachs.

Goldman predicts that middle-income consumers will see the best growth in discretionary income in 2026, and that Olive Garden's expanded menu choices could drive more traffic, given management comments to them suggesting "guest response has been encouraging."

As a result, the investment bank targets Olive Garden's same-store sales growth of 3.7% in fiscal 2026. Goldman Sachs has a buy rating with a $225 share price target, up roughly 20% from current levels at last check.

Related: Popular pizza chain files bankruptcy in major market