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Bloomin' finds keeping staff to be a big reopening advantage

Restaurants are able to reopen efficiently and without the cost of retraining or recruiting, executives told investors Friday morning.
Photograph: Shutterstock

Forgoing layoffs as dining rooms were forced to close is proving a major benefit to Outback Steakhouse and its sister brands as states lift their restrictions on dine-in service, executives of parent company Bloomin’ Brands stressed to Wall Street analysts this morning.

The dining rooms of 355 restaurants across Bloomin’s four full-service brands are currently open in 10 states, CEO Dave Deno told the analysts. The company’s decision to continue paying employees as the brands shifted exclusively to off-premise service “has been an important part of what is driving results,” he said. “As the dining rooms reopen, we have teams ready to go. Our hiring and training costs are minimal.”

In a subsequent interview with Restaurant Business, Deno said the benefits also included the gratitude and high morale that employees have shown. "I have a stack of thank-you cards on my desk that you wouldn't believe," he said. 

He expects an ancillary payback to be the perception of Bloomin' as a place that treats its employees well, not only by the workforce but by the general public. "I think that will definitely be a benefit," he says.

Although Bloomin’ now has hundreds of dining rooms partially opened, it has divulged results only for the 23 Outbacks in Texas that resumed using 25% of their seats during the past week. The state gave the go-ahead to commence table service on a partial basis starting May 1. Sales for the 23 units climbed on average during the week ended May 3 to within 17% of the year-ago level.

The stores that reset their tables saw at most a negligible ebb in their off-premise business, Deno said.

“We want to keep those off-premise gains that we’ve enjoyed,” he told analysts Friday.

Operations have been adjusted to reflect the realities of operating at 25% of normal dining room capacity. For instance, Outback stuck with the shorter menu it’s been using for off-premise customers. With a smaller staff, a narrower menu is easier to executive. Plus, it can help in turning tables faster.

“The table-turn piece is the area that we’ve focused on the most,” Deno said.

The portion of sales generated by alcoholic beverages is higher across all open stores that it was before the pandemic, he told RB. 

What the company learns as units reopen their dining rooms will be channeled forward to sister restaurants as they resume seating guests. It's too early to spot any changes in sales mix or consumers' ordering habits, Deno said.

Outback's menu had been scaled down to facilitate takeout and delivery. "As far as menu plans for the future, stay tuned," Deno told analusts. "We spent a lot of time on that thinking about that. This is an opportunity for us. And just stay tuned."

Bloomin’ alerted the analysts that it has suspended its exploration of a sale or other strategic alternatives aimed at boosting shareholder value. The decision extends to talks with parties who have expressed interest in acquiring Outback’s Brazilian operations, Deno said.

Nevertheless, Deno was asked point-blank if the company might be considering the sale of an equity stake to investors. In recent days, BJ’s Restaurants has sold 3.5 million shares of common stock to Ron Shaich’s Act III investment fund and T. Rowe Price for $70 million, and The Cheesecake Factory has sold $200 million in stock to Roark Capital, the parent of Buffalo Wild Wings, Miller’s Ale House and a host of other casual chains.

 “No,” replied Deno. “Nothing else really to add there.”

In addition to Outback, Bloomin's brands include Carrabba's Italian Grill, Bonefish Grill and Fleming's Prime Steakhouse and Wine Bar. It plans to open the first standalone version of its fledgling fast-casual concept, Aussie Grill by Outback, on Monday. 

I have very high hopes for that concept," Deno told RB.  "It is very much on trend. "

 

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