Bloomin' Brands is Killing Discounting and Boosting Profitability
We thought you would like to read about what Bloomin' Brands has done to improve its business and their key to long-term success.
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Bloomin' Brands reinvigoration of Outback has been grabbing headlines. If you look back to the first quarter of fiscal 2017, the company shuttered 14 restaurants and followed by refranchising 54 corporate stores to longtime franchisee partners.
In Q3 of this year same-store sales rose 4.6 percent with traffic up 0.9 percent.
In the Q1 2017 period, sales were negative at Carrabba's, Fleming's, and Bonefish Grill and 24 units closed down.
Outback remains the top draw with 737 U.S. locations.
Barington Capital Group, L.P., which owns less than 1 percent of Bloomin's shares and represents a group of shareholders, suggested the company spinoff or sell the three chains so Bloomin' could enhance its strategic focus.
Casual groups like Darden, Dine Brands, and Brinker, with just two brands in those latter cases, have managed success following a diversified approach.
In the second quarter of fiscal 2018, Bloomin' Brands said it cut discounting 19 percent systemwide.
Bloomin's goal is to rebuild traffic based on superior food and execution, not deals.
They are targeting more proprietary programs, such as our successful wine dinners and Amore Mondays as well as growing off-premises via Family Bundles and delivery platforms to drive healthier traffic.
Bloomin' ripped out the discounting, took a traffic setback, and then watched much higher quality traffic flow into the system. Fleming's and Bonefish, for example, are on track to report record profitability.
Carrabba's has been a slower grind, though. The chain's pivot was further away from its core proposition of authentic Italian dining at affordable prices.
Bonefish has witnessed a nice improvement over rough lapped results recently. Bloomin's effort to simplify execution, while investing in food and the dining experience returned the brand to what it's known for- fresh fish, innovative drinks, and superior service.
In October, Bonefish rolled out a new brunch menu and expanded brunch to Saturday. This local philosophy helped define Bonefish as the 'unchained chain' and it's paying off in sales and profitability.
Fleming's made some directional changes, too, moving away from legacy-value offerings, such as its 567 Bar Menu, $29.95 Prime Rib, and some non-holiday gift card distributions.
Fleming's will continue their effective strategy of differentiating the brand from the traditional high-end steakhouse to a localized menu selection and customer segmentation. Chains that present like local restaurants, and carry the price tag and service promise to match.
There are benefits to running concepts that serve multiple dayparts and price points, and Rewards is one of them.
Bloomin's Dine Rewards program has more than 7.2 million members. It's attracting a healthier consumer than the average coupon seeker and has also driven strong engagement across Bloomin's portfolio.
The Dine Rewards program gathers data and helps to develop very specific customer profiles, enabling them to market directly to the customer and have enhancements that could drive frequency even further.
2018 FSR Magazine.