Pandemic cuts sales at Olive Garden in Times Square by 94%

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An Olive Garden restaurant located in Times Square, New York.Adam Jeffery | CNBC

In a typical year, the Times Square restaurant in Olive Garden had $ 15 million in sales.But the coronavirus pandemic and local restaurant restrictions have wiped out business at the chain’s best location, slashing its average weekly sales from $ 300,000 to less than $ 18,000.

Darden Restaurants CEO Gene Lee told analysts on the company’s first fiscal quarter call that sales had slowed to just $ 2,500 a day for the take-out slot. Olive Garden accounts for roughly half of Darden’s overall revenue.

And the Olive Garden isn’t the only Darden restaurant to have seen its New York business go downhill. Lee also said the three New York establishments of the Capital Grille, a gourmet restaurant chain owned by Darden, are losing millions of dollars each week in sales.

Dining rooms, which are slated to reopen at 25% capacity on September 30, have been closed in the city since March. On Monday, New York was the US city with the hardest-hit restaurant industry. According to Toast, the city’s restaurant revenues are down 65% from the same period a year ago.

The loss of tourism is among the factors hurting New York’s restaurant industry, including the Olive Garden in Times Square. Pedestrian traffic in the New York City tourist hotspot has fallen about 73% from the same period last year, according to the Times Square Alliance. Less than half of Times Square’s restaurants are open for outdoor dining.

Darden shares rose nearly 5% in morning trading after the company beat analysts’ estimates for its quarterly results. Darden’s overall sales fell 28% in its most recent quarter, but it expects sales to drop just 18% in the next quarter.

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