Baxter Olive Garden to close at end of March
BAXTER--Sunday, March 31, will be the last day of operation for Baxter's Olive Garden. Jerid Courneya, director of operations at the Baxter restaurant, confirmed Monday morning's announcement of the closure. "We always have to look at the trade a...
BAXTER-Sunday, March 31, will be the last day of operation for Baxter's Olive Garden.
Jerid Courneya, director of operations at the Baxter restaurant, confirmed Monday morning's announcement of the closure.
"We always have to look at the trade areas that we're in, and it boils down to a business decision," Courneya said of the lakes area customer base. "Unfortunately, we thought the trade area was just not where we wanted it to be, so we are going to be closing."
The American-Italian restaurant opened on Garrison Road near the intersection of Highway 371 and Glory Road in Baxter in October 2012, creating about 150 jobs in the community. Courneya said he does not know how many employees the restaurant currently employs.
Baxter City Administrator Brad Chapulis took several calls from disappointed residents Monday, but noted the city of Baxter is not involved in a decision like this.
"A decision to close is a business decision that's related to profit losses," Chapulis said. "While we as a city are disappointed in losing a dining option, we believe that it's not reflective of the current dining market in the Brainerd lakes area."
The 7,441-square-foot building, with seating for 246 people, will now be up for sale.
The bigger picture
Though lakes area residents just learned of the closure plans Monday, the Baxter Olive Garden's ultimate fate may have been predicted several months ago.
A Bloomberg article published in late 2018 anticipated a tough stretch for restaurants in 2019, attributed to rising food and wage costs.
And with low unemployment causing higher wages to weigh on profit margins, Robert W. Baird & Co. analyst David Tarantino predicted restaurant businesses with large concentrations of company-owned locations-like Olive Garden's parent company Darden Restaurants-to be hit the hardest.
Olive Garden's lack of delivery service in the lakes area might play into that gloomy forecast as well. Consumer data, Bloomberg reported, showed Americans are demanding delivery, forcing big chains into the game. Chicago-based company Grubhub delivers food from several major restaurants in 1,700 cities across the country.
Locally, the St. Cloud-based business Food Dudes delivers from lakes area restaurants like Boulder Tap House, Grizzly's, Poncho & Lefty's and CherryBerry. Olive Garden is not among its participants.
The 2018 Bloomberg article also included a note from Darden Restaurants that food costs would "tick up" in 2019.
The Florida company owns more than 1,700 restaurants, with Olive Garden accounting for over 850 of them and has more than 96,000 employees. In addition to Olive Garden, Darden owns LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Season 52, Bahama Breeze and Eddie V's.
But Despite Bloomberg's discouraging outlook and the Baxter closure, Darden itself is booming. Nasdaq reports in the third quarter, Darden's revenue went up 5.3 percent year over year to $1.13 billion, with profits rising 9 percent to $247 million. Olive Garden accounted for about half the company's revenues at $2.24 billion and more than half its profit. Darden stock rose nearly 7 percent Thursday, March 21.
Last June, Darden announced plans to open 45-50 new locations among its eight branded restaurants, including Olive Garden. Other Minnesota Olive Garden locations include Waite Park, Maple Grove and Coon Rapids.