Outback Steakhouse is proof proprietary delivery can be done, if the commitment is there.
— Danni Santana
Both Outback Steakhouse and Carraba’s Italian Grill’s delivery businesses continue to shine, much to the delight of parent company Bloomin’ Brands.
The restaurant group, which recently underwent a CEO change last month, reported first-quarter earnings Friday. Among the highlights was that off-premise now accounts for 14 percent of overall sales at Outback and Carraba’s Italian Grill, the two chains Bloomin’ has currently invested funds into for proprietary delivery.
At its investor day in March, Bloomin’ predicted off-premise would soon account for 25 percent of sales, or upward of $500 million, at both brands. Delivery is now available in 550 locations, according to the company. The casual dining operator also spent $400 million in the first quarter remodeling the look of its stores to better handle higher off-premise order volumes.
“These [delivery] locations are exceeding benchmarks across several key metrics, including delivery time, and we are pleased with the pace of the delivery ramp-up,” said David Deno, Bloomin’ Brands CEO, on an earnings call with analysts. “Now that the business is reaching scale, we will begin augmenting existing local marketing efforts with additional tactics to drive awareness.”
Lower Average Tickets
The one headwind associated with delivery, particularly at Bloomin’s flagship brand Outback, is the continued trend of lower average checks on to-go orders compared to dine-in customers, analysts said. Diners currently spend an average of $27 on takeout orders, $42 for delivery and $54 in-restaurant. Outback credits this to customers purchasing more drinks at its brick-and-mortar locations.
“One of the advantages of having your own delivery network is that you have the ability to tweak the operating model as you see fit, and we can make changes that can enhance profitability and enhance the expense for our guests,” Bloomin’ Brands CFO Christopher Meyer said in response.
Same-store sales at Outback improved by 3.5 percent in the quarter, its ninth consecutive period of positive sales results. This was despite a slowdown in traffic due to less discounted prices and unfavorable weather, the company said.
Bloomin’s three other brands — Carraba’s, Bonefish Grill, and Fleming’s Prime Steakhouse and Wine Bar — also reported positive comparable store sales for the first time in the same quarter since the end of 2017, contributing to a combined 2.4 percent U.S. same-store sales increase for the restaurant group. Revenue in the quarter additionally rose 1 percent to $1.1 billion.