Chris O’Cull: Rick, you’ve tied the traffic outperformance this quarter to less pricing than the competition. So, I’m just wondering why you believe consumers are now noticing that difference in relative value. If there was some sort of trigger with a marketing or advertising effort, or what do you think has caused that change this quarter?
Rick Cardenas: Hey Chris, I would say that I don’t think it’s just this quarter. I think it’s been a long time what we’ve been doing. We’ve been underpricing inflation. Even before COVID, we started underpricing inflation, and we’ve been putting more on the plate. And so, we’ve actually invested while underpricing. And so, if you look at variable margin, contribution margin, just take Olive Garden, for example, you can’t do the math. But if you look at contribution margin in Olive Garden, it’s lower today than it was before COVID. But their margins are up. So our consumers are seeing that they’re getting more value when they come into the restaurants, and that doesn’t take — it doesn’t take a week to figure that out. It takes them a long time to figure that out.
And that’s why when we talk about what we’re doing, you have to think about this over the long run because we’re not shouting out to the rooftops that we’ve done this. The closest that we did to that was brought Never-Ending Pasta Bowl back at a $3 higher price to show people that we still have some great value in our restaurants, and Olive Garden being on TV talking about the things that make their brand special. Right now, where we’ve got back on our advertising and sauces sold and talking about our freshly made cases every day, while we still have a 15-second spot talking about our never-ending first course. And so — and that never-ending first course is on us. There aren’t many brands that actually give you never-ending that for every item that you order.
And so, again, it’s not something that we necessarily talk about. We don’t go out and shout from the rooftops that we have lower prices than others do or we’ve priced less. They see it as they come into our restaurants, and that builds over time.
Chris O’Cull: That’s great. And I know you guys have a rich consumer data set. I mean, does your data indicate that certain consumer segments have increased their frequency of visits, especially at Olive Garden?
Rick Cardenas: What I would say is versus pre-COVID, our data would tell us that — that we’re getting a little bit younger than we were before COVID across all of our brands, and that’s somewhat driven by an increase in to go business. But the great news is a lot of these folks had actually used us for to go for the first time, and that’s their first visit to us, are actually starting to come into our restaurant, too. So it was kind of a handshake to come in. And so we’re slightly younger, but our consumer segments are fairly similar to what they were before. And that’s great news for us. We’re also getting a little bit more frequency in our core guests. And that’s really what we’ve been focusing on. So, the good news is our consumers are not that different. They’re slightly younger. That means that we don’t have to really change what we’re doing because we can keep talking to our consumers just like we have been before.
Operator: Our next question comes from Sara Senatore with Bank of America.
Katherine Griffin: Hi. Thank you. This is Katherine Griffin on for Sara. I just wanted to ask again on marketing, sorry. Just if you could speak a little bit about what you’re seeing at other restaurants, if you’re seeing them ramping up on marketing and promotional spending?
