An Olive Garden restaurant located in Times Square, New York.
Adam Jeffery | CNBC
During a typical year, Olive Garden’s Times Square restaurant rakes in $15 million in sales.
But the coronavirus pandemic and local restrictions on dining have wiped out the business of the chain’s best location, cutting its average weekly sales from $300,000 to less than $18,000.
Darden Restaurants CEO Gene Lee told analysts on the company’s fiscal first-quarter call that sales have slowed down to just $2,500 a day for the takeout-only location. Olive Garden accounts for roughly half of Darden’s overall revenue.
And the Olive Garden isn’t the only Darden restaurant that has seen its New York business falter. Lee also said that the three New York locations of the Capital Grille, a fine-dining chain owned by Darden, are losing millions of dollars every week in sales.
Dining rooms, which are set to reopen at 25% capacity on Sept. 30, have been closed in the city since March. As of Monday, New York is the U.S. city with the hardest hit restaurant industry. According to Toast, the city’s restaurant revenue is down 65% compared with the same time a year ago.
The loss of tourism is among the factors hurting the New York restaurant industry, including the Olive Garden in Times Square. Pedestrian traffic in the New York City tourist hotspot has plunged to about 73% from the same time last year, according to the Times Square Alliance. Less than half of Times Square’s restaurants are open for outdoor dining.
Shares of Darden rose nearly 5% in morning trading after the company topped analyst estimates for its quarterly earnings. Darden’s overall sales fell 28% during its most recent quarter but it expects sales declines of only 18% next quarter.