Health reform implementation

Restaurant chain says criticizing ‘ObamaCare’ may hurt its earnings

A major restaurant chain said Tuesday that its complaints about President Obama’s healthcare law have been bad for business.

Darden Restaurants, which owns Olive Garden and Red Lobster, had previously announced plans to cut its workers’ hours so that it wouldn’t have to provide health insurance under the law’s employer mandate.

Darden is one of several large employers to consider rolling back workers’ hours in response to the Affordable Care Act. But the company said Tuesday that negative publicity surrounding that position might be bad for business.

{mosads}The company on Tuesday lowered its earnings estimates for fiscal 2013, and said in a statement that the weaker projections owe in part to concerns over a backlash to its healthcare stance.

“Our outlook for the year also reflects the potential impact, though difficult to measure, of recent negative media coverage that focused on Darden within the full-service segment and how we might accommodate healthcare reform,” Darden CEO Clarence Otis said in a statement.

The company said it would figure out how to make the new healthcare requirements work.

After saying Darden’s brands are working to improve their products and marketing, Otis added that “we are also committed to accommodating healthcare reform in ways that work for our employees and guests.”

Several restaurant chains and other businesses with large numbers of part-time workers have said they plan to either roll back hours or raise prices to offset additional healthcare costs. 

One such firm — Papa John’s Pizza — suffered a hit in its brand favorability following its comments about the health law, according to a recent consumer study.

The research firm YouGov found that customers’ impression of Papa John’s and Applebee’s fell in the weeks after Election Day, when both companies indicated plans to cut workers’ hours or raise costs because of healthcare reform. 

That analysis, however, only captured adults who had eaten in a casual restaurant within the past month. A Papa John’s spokesperson told the Huffington Post that the company’s standing remained high in YouGov surveys with a broader sample.


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