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Casual dining feels the wallop of a slowdown

outback steakhouse exterior

Casual dining’s sales challenges were underscored this morning by the release of first-quarter financial results for two of the segment’s diversified operations.

Bloomin’ Brands, a giant of the sector, reported negative same-store sales for Outback Steakhouse (1.3 percent), Carrabba’s (2 percent) and Bonefish Grill (2.7 percent). Only the company’s polished-casual entrant, Fleming’s, posted positive comps (1.3 percent).

The high end of the market wasn’t as kind to Del Frisco Restaurant Group. The operator of expense-account steakhouses posted negative same-stores sales for Del Frisco’s Double Eagle (0.1 percent), Sullivan’s (1.8 percent) and its lowest priced brand, Del Frisco’s Grille (2.8 percent).

Del Frisco indicated that its Double Eagle and Sullivan’s concepts had suffered traffic declines of 0.9 and 4.5 percent, respectively.

Del Frisco’s Grille served 1.9 percent more customers, but that gain was offset by a 4.7 percent decline in the chain’s average check. The steakhouse company has been striving to make the Grille more accessible by focusing on less-expensive menu choices and marketing it as an everyday dining option.

Bloomin’ did not break out traffic figures for its brands.

Another behemoth of the segment, Brinker International, posted negative domestic comps of 3.6 percent last week for its workhorse brand, Chili’s. It noted that Chili’s restaurants operated by the company suffered a 4.9 percent drop in traffic.

Brinker CEO Wyman Roberts attributed the decline in part to heightened competition within the segment and stepped-up discounting by quick-service chains.

“Our takeaway is, we have to be even more aggressive with our value proposition and the message and media to breakthrough in this environment,” he told financial analysts.

Liz Smith, CEO of Bloomin’, said in a statement that she expects her charges to perform better during the second half of the year as new initiatives take effect.

Bloomin’ also reported that one Outback unit and six Bonefish Grills had closed during the quarter.

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