A lot of time and patience was put into building Bloomin’s data infrastructure capabilities, and now it’s time to cash in on the 7.2 million customers in its Dine Rewards program. This includes Outback, and it also includes cross-fertilizing traffic from the steakhouse’s success into Bloomin’s other brands.
“[The confidence is] centered around the investments that we have made in the box come on quality, service,” Smith said. “The vast majority of our strength is our in-house traffic and that's directly applicable to superior execution that we are having in the box.”
“When you look at the sales layers that are out in front of Outback, it's not a quarterly discussion or quarterly concentric, it's just feeling like we really positioned this brand exceptionally well for the future,” she added.
Refresh and reward
Another trigger for future gains is the ambiance focus. Outback is currently testing multiple design prototypes for a new interior remodel program. Exteriors pivoting to interiors that will modernize stores, Smith said, and expand Outback’s off-premises room to handle higher order volumes. Some could add seats to meet the improved traffic as well. The company predicts a 3 percent traffic lift, consistent with prior remodels, at these refreshed stores.
Once the prototype is settled, Outback will complete the program over a three-year period, Smith said. These are running around $300,000–$400,000 depending on the size of the box.
Meanwhile, Outback’s relocation program is firing up sales lifts well in excess of 30 percent. There are 14 in the pipeline for this year, and Smith said Outback is moving restaurants as quickly as quality sites become available. That comes down to supply and a function of category, she said. Meaning casual brands are holding onto A sites and it’s a race for real estate as much as anything else.
Regardless, Smith said Outback would tackle the opportunities as they arise, especially since some of those remodels jumped to a 50 percent sales increase. Outback has also spoken before about an opportunity to add 50 incremental restaurants. All in all, the footprint of the chain is shifting, and for the better, Smith said.
Deliver the results, and the data
In Q2, Bloomin’s 240 existing delivery locations began to “constantly hit established targets for several key metrics, including delivery time and deliveries per locations,” Smith said.
As a result, Bloomin’ resumed the rollout program in Q3 and expects to add an additional 200 locations across Outback and Carrabba’s by year’s end. Smith anticipates all locations completed in 2019.
Currently, off-premises represent about 30 percent of Bloomin’s business. It grew in the low double-digits in Q3. “Everything about that business is really coming together,” Bloomin’ CFO Dave Deno said. “Why is that? We built the in-house capability to make that happen. And we're very pleased with the adoption of our teams of doing that. And it gives us the data. It gives us that our process flow through. It gives us complete control that customer experience as we go forward,” he said.
Bloomin’ is working on an omni-channel approach. It’s also testing third parties. “Everything about delivery is exactly where we hoped in many respects on the top quartile of our restaurants,” Smith added. “It certainly is providing validation for our belief that this is: one, incremental; and two, it's absolutely where the customers going. They want to enjoy restaurant, quality food, many times in the comfort of their home.”
In respect to the omni-channel approach, Smith said it comes down to making sure the food is simply everywhere the guest is looking for it.
“We always want to be customer centric,” Smith said. “So if a customer wants to get our product, our delivery through a third-party aggregator, and it's available, we're looking at that. Some people have different ways that they go the market.”
Brazil on the mend
Smith said comps sales in Brazil, where there are 92 Outbacks, should turn positive this quarter thanks to a better macroeconomic backdrop. They dropped 3.3 percent in Q3 as the country experienced unrest living up to the recent president elections, Smith said. “This has led to protests and a lengthy truckers strike,” she said, “… that resulted in numerous lost operating days for many businesses, including our restaurants. We believe these dynamics were more event-driven rather than a reflection of the improving underlying health indicators of the Brazilian economy.
“Brazil's had 20-plus years of great performance. It's back on track and performed actually quite well in a difficult environment in 2018,” Smith said.
“I think we feel like it's a thumbs-up for Brazil,” she added later.
