Outback Parent Company Sees Great Promise In Off-Premise Sales
Photo Caption: How well do those Bloomin' Onions travel?
Skift Take
Unlike some of its competitors, Bloomin' Brands is bullish on the potential of delivery, take-out, and catering to eventually make up 30 percent of the company's overall sales. They are willing to invest in everything from an in-house delivery team to store remodels with specific delivery-friendly components to make it happen.
Bloomin' Brands, parent company of Outback, Carrabba's, Bonefish, and a handful of other brands that activist investors want the company to sell off, sees a bright future in the company's delivery, take out, and catering business. Bloomin' Brands CEO Elizabeth Smith affirmed on the company's third-quarter earnings call today that the team is confident that off-premise sales will eventually reach 25 to 30 percent of total sales. The business currently accounts for 13 percent of overall sales.
"We are very excited about our progress and the incremental opportunity it represents," Smith said on the call. Bloomin' owns 240 Outback and Carrabba's locations that support delivery capability, and it plans to add delivery support to 200 more by the end of the year. In 2019, about 70 to 80 percent of Outback and Carrabba's locations will offer delivery.
"Everything about that business is really coming together," David Deno, executive vice president and chief financial and administrative officer, said. "Why is that? We built the in-house capability to make [delivery] happen, and we're very pleased with the adoption by our teams of doing that. And it gives us the data. It gives us that process flowthrough. It gives us complete control of the customer experience as we go forward."
That's not to say that customers won't ever see Outback pop up on Grubhub. Both Smith and Deno were adamant that they want to meet the customer wherever they are, whether they are browsing company-owned sites or third-party delivery services. Deno noted that Bloomin' Brands is currently in tests with a third-party delivery service.
Simplicity?
At Carrabba's, there has been a concerted effort to dial down "complicated and disruptive" limited time offers in favor of sticking with a core menu combined with special occasions and proprietary programs, like wine dinners and special deals on off nights. Executives hope this strategy to encourage "healthy" traffic combined with off-premise sales will help the brand rebound. "We will be patient in rebuilding traffic based on superior food and execution, and we'll continue to migrate from discounting, which is down 37 percent year-to-date," Smith said.
New restaurant remodels will also feature design that better facilitates delivery traffic flow, including a to-go space that will serve as a separate entry and exit point for delivery drivers. Bloomin' also operates five hybrid Outback and Carrabba's express locations that are solely dedicated to delivery and take out. "[Delivery] is absolutely where the customer is going," Smith said. "They want to enjoy restaurant quality food, many times, in the comfort of their home."
Same-store sales for U.S. restaurants across all brands were up 2.9 percent in the third quarter, with Outback sales in particular up 4.6 percent. Bloomin' Brands' stock was trading up 1.75 percent at market close on Monday.
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