Carrabba’s Banks on Off-Premises Sales and a Robust Loyalty Program
Carrabba’s Italian Grill may not get the same fanfare as the other restaurants under the Bloomin’ Brands umbrella, but this casual Italian chain with 200-plus locations may be suiting up for its moment in the spotlight after a recent quarterly earnings call from its parent company.
Bloomin’ Brands currently operates and franchises approximately 1,500 restaurant locations in 48 states and several countries. Besides Carrabba’s, the Bloomin’ Brands portfolio includes Outback Steakhouse, Bonefish Grill, and Fleming’s Prime Steakhouse & Wine Bar.
The company reported that revenues were down 5.9 percent to $1 billion, compared to $1.1 billion last year, in the fourth quarter earnings call. However, combined same-store sales for the company’s U.S. portfolio were up 1.6 percent during the last quarter, and, sales were up 0.8 percent at Carrabba’s.
In fact, Carrabba’s sales overall were better than expected, with comp sales up 80 basis points in the quarter, as reported by Bloomin’ Brands CEO Liz Smith. “Carrabba’s remains focused on driving healthy sales and providing a great authentic Italian meal at affordable prices,” Smith said during the call. “We continue to simplify the core execution, while investing back into experience with larger portions and service enhancements.”
Some of those service enhancements Smith is referring to are the proprietary menu programs that Carrabba’s offers. Rotating daily specials that include Amore Mondays, Sangria Sundays, Date Night Thursdays, Founders Favorites Tuesdays, and Pizza and Wine Wednesdays are a way to ensure increased business on some of the slower nights of the week.
The biggest boost to Carrabba’s business has likely been its introduction of off-premise services. “Our growing off-premise business via Family Bundles, catering, and delivery platforms represents a significant incremental opportunity in 2019,” Smith said.
Investing in Growth
The focus on delivery and the Dine Rewards loyalty program has accelerated since 2016 when the company took steps to reduce discounting and invest in incremental levers to accelerate growth. “Our No. 1 priority remains driving healthy, profitable sales growth across the portfolio,” she said.
Bloomin’ Brands invested $50 million into food and service enhancements, helping shift its media spend from mass marketing to digital personalization, focus on building its loyalty program, and rapidly grow the off-premises business.
Smith says the company is excited about the opportunity delivery represents as it capitalizes on the growing consumer demand for enjoying restaurant meals at home. “In Q4, we completed the rollout of an additional 200 delivery locations across Outback and Carrabba’s,” Smith said. “Delivery is now available in over 450 locations as of the end of the year.”
A Wait-and-See Approach
Bloomin’ Brands expects to have 600 locations offering delivery by the end of this year, and company representatives seem optimistic about the idea of expanding Carrabba’s with additional locations, if what they’re doing with off-premises sales and loyalty works. “We have always been very disciplined about new unit growth,” Smith said. “We’re feeling increasingly enthusiastic about Bonefish and Carrabba’s.”