In a self-described challenging year for Bloomin’ Brands, the casual-dining company decided to close 43 underperforming restaurants while increasing its delivery efforts to give customers a differentiated dining experience.
The brand—which encompasses Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, and Fleming’s Prime Steakhouse & Wine Bar—saw its comparable restaurant sales decrease by 1.9 percent in 2016.
“We recognize there's more work to do in 2017, and have a defined strategy to achieve our objectives. The first priority will be to grow sales in the U.S. behind significant investments in enhancing food quality, service, and ambience in our restaurants,” CEO and Chairman Elizabeth Smith said in a conference call. “We have growing confidence that our heightened focus on elevating the customer experience will drive healthier, sustained growth in 2017 and beyond. Our second priority is investing behind the emerging off-premise opportunity.”
Bloomin’ Brands plans to have 115 restaurants offering delivery by the end of Q1 2017, and these efforts will primarily focus on Outback and Carrabba’s locations. “The key part with delivery is, you've got to really nail it and do it right,” Smith says. “That means high food quality, high speed, really spending the time to make sure our customer service metrics and feedback are exactly where they want to be. You kind of got one shot to establish yourself as a really credible delivery alternative.”
Smith said the dine-in cannibalization one might expect from delivery isn’t the case as brand research has shown customers tend to first make a decision on whether they would like to go out to eat or stay in.
Bloomin’ Brands is testing the use of a third-party network for delivery as well as its own delivery network. “In our view, off-premise represents the first structural tailwind in the industry in quite some time,” Smith said. “We intend to capture our fair share of these incremental occasions when dining at home is preferred.”