Bloomin’ Brands CEO: Delivery Creates New Reasons to Buy — but Pickup Doesn’t

As casual dining brands look to drive sales across digital and physical channels, Bloomin’ Brands is finding that, while delivery may be incremental to the company’s core dine-in business, pickup typically is not.

On a call with analysts Tuesday (Aug. 1) discussing the company’s second-quarter FY 2023 financial results, the casual dining group, owner of Outback Steakhouse, Carrabba’s Italian Grill and others, spanning nearly 1,500 locations around the world, spoke to the unique opportunity that the delivery channel presents.

“Between carry-out and in-restaurant, there’s a lot of overlap,” Bloomin’ Brands CEO David Deno said. “The customer either comes in to eat or does carry out, but in delivery, especially third-party delivery, that’s an incremental occasion, and we’ll continue to invest heavily in that, because that’s a customer opportunity for us.”

Overall, the company’s off-premises business accounted for 24% of all U.S. sales in the quarter.

While delivery may present new sales opportunities for the brands, consumers are less willing to pay the premium for the service now, with rising prices putting pressure on their budgets. In fact, PYMNTS research finds that pickup orders outnumber delivery 4 to 1, according to the study “Connected Dining: Rising Costs Push Consumers Toward Pickup,” for which we surveyed more than 2,100 United States consumers earlier this year.

The results revealed that 39% of restaurant customers ordered their most recent meal for pickup, and only 10% did so for delivery. Plus, the findings showed that nearly half of all consumers (48%) have been more likely to pick up their restaurant orders themselves rather than have them delivered due to inflation.

Granted, casual dining brands are at a disadvantage when it comes to off-premises relative to their quick-service restaurant (QSR) competitors, as part of what consumers are paying for when they spring for the moderately more expensive category is service. Bloomin’ Brands, for its part, is leaning into alternative off-premises channels to bolster the business.

“Catering continues to be a growing opportunity for our brands. The Carrabba’s team is an industry leader in the space. … We’re also very pleased for the strong momentum we are seeing catering at both Outback and Bonefish,” Deno said.

He noted that the Carrabba’s recently debuted a set of catering options geared at the lunch daypart, and the company has been “very excited” by the results so far. Overall, catering accounted for more than 5% the Italian restaurant’s sales in the quarter, and the company is stepping up its efforts in the space across the other restaurant brands.

Summer is certainly a good time to have a catering presence, especially for businesses that target consumers — and Deno did indeed emphasize that “the consumer loves our catering business.”

As Darien Terrell, president and CEO of third-party catering delivery service DeliverThat, noted in an interview earlier this year with PYMNTS, occasions pick up in the warmer months.

“In the summertime, you’re going to get more of the events,” Terrell explained. “People are more outside, they’re having events, graduation parties, things of that nature, but the vast majority of our business is going to B2B.”