New ways of getting food to hungry customers were key for Bloomin’ Brands, the Tampa-based restaurant giant, during the Covid-19 pandemic.
Bloomin’ (Nasdaq: BLMN), the parent of Outback Steakhouse, Bonefish Grill, Carrabba’s Italian Grill and Fleming’s Prime Steakhouse and Wine Bar, was able to draw on earlier investments in digital innovations that powered a strong takeout and delivery business when indoor dining was closed or had limited capacity, said CEO David Deno.
While the company pivoted, Deno learned to adapt his own leadership style, in part by sharing more of his experiences with colleagues.
“I’m pretty good at walking around and talking to people but I’ve still got a bit of that Minnesota reserve in me and some of the people I work with tell me, Deno, open up a little bit more and talk about what’s going on in your life. People want to know, they want to engage more and see more,” Deno said during an online interview with Nation’s Restaurant News.
“In the past I’ve had a bright line between my personal life and work, and sometimes I can do a better job opening up more about that. I tried to do that during the pandemic and had some pretty good results but I’ve got to do more of that going forward because people want to know. They want to know about their leader. They want to understand. They want to see what’s on my mind.”
Deno also shifted his approach to decision-making.
“I’ve always had some difficulty as a leader being really direct and saying, no we have to do this and no we have to do that. I like to take people with me and have folks come along the journey and then the decision might take a little bit longer,” Deno said. “But in a pandemic when things are changing every day, every hour, I had to be more direct and have more of a crisis management style.
“I’m not saying things are over but they are not quite as dramatic as a year ago at this time so I have to strike the right balance between being as direct and set the priorities as much as possible, yet have people in the organization learn themselves, move forward and enjoy their job and their responsibilities.”
‘We got this’
The adaptations have paid off. Bloomin’ reported $70.2 million in net income for the first quarter of 2021. A year ago, the company was deep in the red with a $38.1 million loss. Bloomin’ sales for Q1 2021 were $987.5 million, a slight drop from the same quarter a year ago, but significantly higher than sales for the previous three months.
During the May 4 interview, Ron Ruggles, senior editor of Nation’s Restaurant News, asked Deno how the company was able to get through the pandemic with no employee furloughs or layoffs.
“I had the personal advantage of going through the SARS situation in China when I was with Yum Brands in 2002 and 2003. Even though things were difficult at the time, I knew we would come out of this. Science would help solve it. We would come back,” Deno said. “I told our team put your customers and your employees first. Nothing else matters. That’s when we decided not to let anybody go, not to furlough anybody, because we knew when we came out of this, we would have a talented and trained and very engaged workforce which has helped us immensely.”
He constantly kept in touch with the 500 employees in Bloomin’s restaurant support center.
“I was writing personal notes, at least once a week and sometimes twice a week, opening up about my family and where I came from, what I believe. I think the main thing was it was a sense of purpose for our company,” Deno said. “I finished every single note with three words — We got this. The company was on top of it. The country was going through a lot, but at the end Bloomin’ Brands was going to be just fine and we got this. That was a key phrase for us as we went through the pandemic.”
Although Bloomin’ is on track, the restaurant industry took a big hit during the pandemic. About 110,000 restaurants closed, either temporarily or permanently, in 2020, according to the National Restaurant Association.
“What happened in the restaurant business was a real tragedy,” Deno said. “However, having said that, companies that are larger and have scale can now expand moving forward with greater market share. There are real estate opportunities to relocate restaurants, to build more restaurants, and we’re on it. We have pipeline meetings all the time to talk about new restaurants.”
A shortage of building supplies, such as steel and wood, are the primary factors holding restaurant construction back, he said.
Deno said there are two major innovations that will be long-term for Bloomin’. One is off-premise dining, including carry-out and delivery.
“I firmly believe that will stick even in the casual dining industry. I think people’s eyes have been opened by what they can get at home, the quality of food they can get at home, from concepts like ours,” Deno said.
He also cited digital marketing and other digital initiatives.
“Also you are going to see digitization in the restaurants — in the back of the house cooking, in the customer experience out front. If you want to have a relatively quick meal, you can order with your phone or ordering at the table and pay at table, that can happen. If you want a full interaction with wait staff that can happen as well. So I think the digital piece is the second big one coming up.”
During the pandemic, Bloomin’ Brands opened two new concepts.
Tender Shack offers chicken tenders and sandwiches made in the Outback and Carrabba’s kitchens and delivered to customers.
Aussie Grill by Outback is a fast-casual version of Outback, with a drive-thru and some indoor dining in free-standing locations. There are a handful of locations open now, including locally in south Tampa, Brandon, Riverview and Wesley Chapel, with a store expected to open in the fall in Clearwater.