The first quarter of 2018 marked the fifth consecutive quarter of continued momentum for Tampa-based Bloomin’ Brands, said CEO Liz Smith during an April 26 earnings call. The parent company of Outback, Carabba’s Italian Grill, Fleming’s Prime Steakhouse and Wine, and Bonefish Grill said the tactics of its growth strategy are paying off.
Combined same-store sales for all of Bloomin’s brands were up 2.8 percent with Outback leading the pack. Same-store sales at U.S. Outback locations grew 4.3 percent compared to the same quarter in 2017. Outback’s traffic was up by 2.2 percent, the third consecutive quarter of positive traffic gains, Smith said.
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Meanwhile, sales at Carrabba’s were up .9 percent, sales Fleming’s were up 2.9 percent, and sales at Bonefish were down .1 percent.
Smith pointed to Bloomin’s growth strategy, focused primarily on Outback, as the driving factor in Bloomin’s success. Each lever is contributing, she said. Those levers include enhanced food quality and portion size, service upgrades, improved ambiance driven by renovation, personalization through data, and new off-premise sales sites.
At Outback in particular, a remodel program that started with exterior renovations has concluded and is moving into interior renovations in 2018. Smith said the brand expects to complete the interior remodel program over the next three years.
“Ambiance is really important,” Smith said on the call. “We were really thrilled with the exterior remodel and we do expect the interior remodel to perform very similarly. That’s going to be a three-year journey and it’s our commitment to never get behind again on assets.”
Meanwhile, across brands, the Dine Rewards loyalty program is both driving sales and allowing Bloomin’ to target and personalize its customer communication. While Smith said Bloomin’ is moving away from discounting, the Dine Rewards program provides customers a discount at any of the company’s brands after every fourth visit. The cross-brand program is also helping to spread traffic across brands, from the more popular Outback into lesser-known restaurants like Fleming’s.
“We’re still seeing the same kind of benefit with people joining, i.e. the low fruit hasn’t all been picked,” Smith said about continued growth in the loyalty program. “It just continues to perform extremely well and drive traffic across the portfolio.”
As an added benefit, the data Bloomin’ has gathered about customer behavior through the rewards program has allowed the company to develop 12 million selective emails to tailor communication.
“Since we know a lot about [them], we’re now mining our database to tailor our communications and that’s pretty powerful,” Smith said.
But not everything centers around dining in the restaurant, especially with millennial customers. Smith said for the 12th year, overall traffic is down again, but Bloomin’ has 240 delivery restaurants to drive sales for delivery and takeout—160 of which are Outback and 80 are Carrabba’s. The stores have a smaller footprint and are bringing in sales for Bloomin’, Smith said.
“By every measure and customer survey out there, the potential for offsite delivery is enormous,” Smith said. “Nearly a third of millennials use delivery once a week. This highlights consumers’ desire for convenience and foreshadows where market demand is going.”