A: It has no major impact. There is a lot of risk to putting your brand on heavy sales. It reinforces what it's worth, and it is challenging to get back normalized pricing after an extended period of time. You see it in consumer packaged goods that get supported by coupons. They lose their ability to command a premium.
Q: You must be operating each restaurant with one fewer employee?
A: No. That gets to the quality. When you reduce staffing, the customer experience gets eroded. You breach trust at a time when their restaurant visits are more dear than they've ever been.
Q: Surely Darden has made mistakes in this bad economy. What has failed or backfired?
A: We underestimated last summer the depth of the slowdown. Fuel prices were a big problem, and we didn't see that coming. We weren't as conservative as we needed to be.
Q: What is the smartest thing Darden has done?
A: Work as hard as we can to protect our people. A lot of companies saw the opportunity to take reductions. That breaks the bond with employees, and as things recover, you can pay.
Q: Did you get rid of weaker employees and replace them with good ones?
A: No. Our talent evaluation process is a good one. We didn't feel like we had many low performers, because we had been pretty disciplined.
Q: Based on your most recent data, what is happening with the economy now?
A: It's stabilized, but at a low level.
Q: What should companies do differently once the economy turns and consumers spend more?
A: Companies that will win are working right now to better position themselves to serve their customers, strengthen their offer, improve the business model. They will be able to move faster. They need to be investing in people, in the skill set. Look at the financial services. It's been under stress, but there are firms that have taken steps to get better, and you're seeing them perform better even before the economy turns.