Among the strategic moves planned by the parent of Outback Steakhouse for 2021 is the expansion of the steak chain’s fast-casual spin-off, Aussie Grill by Outback, which will eventually grow in part through franchising, according to CEO Dave Deno.
The planned opening next year of five to 10 more units, adding to the three already operating in the U.S., comes as Outback and the other established concepts run by Bloomin’ Brands are approaching the sales levels of a year ago, before the worldwide pandemic was declared. Management revealed on Friday that sales at Outback units open for at least a year climbed during September to 93% of the levels logged at the same time in 2019. “Our other U.S. concepts saw similar monthly progress in sales results,” CFO Chris Meyer told financial analysts.
Bloomin’s second-largest concept, Carrabba’s Italian Grill, generated third-quarter sales that were within 91% of the year-ago figures.
The decline in comparable sales was more pronounced for the company’s other brands, which include Bonefish Grill (down 22.5% for Q3) and Fleming’s Prime Steaks and Wine Bar (down 20.3%). But the company has judged the time right to step up domestic development of Aussie Grill and exponentially expand the test of another new brand, Tender Shacks, a virtual concept specializing in chicken tenders, fries and cookies.
“I do think we have to prepare for the new normal,” Deno said during an interview with Restaurant Business. “I’m personally very hopeful that next year at this time life will be getting back to normal. Convenience, delivery and drive-thru will be the big game-changers.”
Aussie Grill fits that paradigm. The concept was conceived as a possible growth vehicle for overseas markets, where local operators were looking for a concept that required a smaller plot, was less expensive to build, and met what’s often a stronger demand abroad for off-premise options.
Its menu sports three types of center-plate items: Handhelds, which include burgers, a chicken sandwich and a shrimp po’ boy; Big Plates, or platters of chicken, ribs and tenderloin, all served with fries or chips; and salads, which are topped with proteins. One current location offers beers as well as seltzers. The sides include Aussie Cheese Fries, but not one of Outback’s signatures, the Bloomin’ Onion.
A few units overseas have already been franchised, and the Bloomin’ intends to franchise the concept domestically as well, Deno said. Bloomin’ has entered into franchise agreements for its full-service brands on a limited basis. One of the key factors in Outback’s success has been a program whereby local operators can buy into their stores, but not in a franchising arrangement. Rather, they become equity partners in a store.
Aussie Grill is already being run as a separate division within Bloomin, under the direction of Suk Singh.
Both that concept and Tender Shack could be models for similar ventures, Deno acknowledges. With Tender Shack, “people are already asking us, ‘Are you going to do tacos, too?’” he comments. “We could, but one thing I’ve learned in this business is that if you have a good idea, crush it. We want to crush the virtual chicken category. It’s such a growing category.”
Bloomin’ similarly intends to get Aussie Grill humming before it considers a possible drive-thru riff on a second brand. In revealing third-quarter results, Deno noted that Carrabba’s has adapted particularly well to the surge in takeout and delivery that came with the shutdown of dining rooms in March and April. But a Carrabba’s drive-thru is not in the works, he says.
Ghost kitchens are a different matter, he suggested, without providing sales. Bloomin’s Korean operation already sports 14 of them, according to corporate documents.
Deno stressed that Bloomin’ wouldn’t be able to raise its focus beyond the here and now if it weren’t for a key strategic decision the company made at the start of the pandemic: Not laying off any employees. Hours might have been cut, but no one was dropped from the payroll.
“It was one of the smartest and one of the proudest moments of our company,” he says. “We really did right by our people and our people did right by us.”
Because of that move, he says, the company could move quickly if another flare-up of coronavirus leads to a re-shutdown of restaurant dining rooms on a widespread basis.
“Believe me, we know how to offer delivery and carryout to our customers,” he said. “We also know have to operate under extraordinary conditions.”