Werewolves likely cowered after hearing the howl that went up this week on Wall Street, where investors in casual-dining stocks might have felt like vampires sunning on a Cabo beach. Wasn’t the segment in the midst of a turnaround?
Why, then, have traffic counts been so bad in this week’s flurry of third-quarter financial reports? Outback’s guest tallies slipped almost a percentage point, while Carrabba’s fell 3.7 percent and Bonefish Grill suffered an off-the-cliff plummet of 8.5 percent.
Famous Dave’s had the sort of free fall you seldom witness outside of amusement parks and air shows. Comps dropped 7.9 percent, dragging down revenues by 16 percent.
The question is why.
Liz Smith, CEO of Bloomin’ Brands, blamed a steep decline in dinner visits for the whole sector. But she also acknowledged some misfires by her team, including Outback’s launch of a shrimp-and-steak combo deal that drew yawns instead of additional customers. She noted that Carrabba’s tempered its advertising expenditures, and she suggested that Bonefish is still in the FEMA-rescue stage, with new executives wading into the operation to right the kitchen and clean up the brand’s perception.
Famous Dave’s CEO Adam Wright noted once again the repellent actions of his predecessor, without naming Ed Rensi by name. Winning back customers, never mind adding new ones, is going to take some time, he stressed.
Wright detailed a few efforts underway to redeem the brand in consumers’ eyes. Last month the chain brought back founder Famous Dave Anderson to revive a barbecue-centric culture. And indeed, Wright said in a statement, Anderson has already spent his time since returning in the R&D kitchen, whipping up two new potential signatures for Famous Dave’s: Fried chicken and short ribs.
Smith said her charges will try to add topspin to casual dining’s turnaround in part through the rollout of a smartphone app for Outback. Among its features will be the ability to put the user’s name on a restaurant’s waitlist and to pay for a meal at will.
Carrabba’s is simplifying its menu while repositioning the array as more Mediterranean than red-sauce Italian.
Kona Grill voiced excitement about a new Happy Hour program that features martinis made with the call brand Tito’s.
Of course, not all casual chains have suffered a decline in traffic. Texas Roadhouse hosted 5.2 percent more guests, driving up comp sales by 6.9 percent.