Insider Q&A: Bloomin' Brands CEO David Deno

This undated photo provided by Bloomin’ Brands, Inc. shows David Deno, the CEO of Bloomin’ Brands. The pandemic is making changes at Bloomin’ Brands, which owns Outback Steakhouse and other restaurants. CEO Deno says 39% of orders are now delivery and carryout, up from 20% in 2019. (Bloomin’ Brands, Inc. via AP)

As coronavirus lockdowns hit the U.S. in March, Bloomin’ Brands CEO David Deno called an emergency meeting for his 12-member executive team.

“We collectively said, ‘What we do today and over the next few months will be remembered forever, so let’s be proud of the decisions we make during this time,’” Deno said.

There have been plenty of decisions. Bloomin’ Brands — which operates more than 1,100 Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse restaurants in the U.S. and Brazil — decided not to furlough its 93,000 employees. It offered them relief pay and health insurance while restaurants were closed.

As restaurants reopened, menus were streamlined to cut costs and ease growing delivery and carryout orders. Over the summer, the Tampa, Florida-based company launched a new delivery-only brand, Tender Shack, which makes fried chicken in Carrabba’s kitchens.

Those efforts helped Bloomin’ outperform some rivals. U.S. same-store sales were down 13% in the July-September period. Industrywide, spending at full-service U.S. restaurants was down 25% in the same period, according to NPD Group.

Deno spoke with The Associated Press about the impact of the coronavirus. His comments have been edited for length.

Q: How are things looking as you head into winter?

A: What we’re seeing is, as long as you make sure you serve your food in a safe environment, we are in really good shape. I don’t make light of it at all, and there are concerns out there. But we’re finding our customers want to come in and eat our product and enjoy our service. A large part of our footprint is in the Texas and Florida area, where actually eating outdoors is preferable than the hot summer. So that’s going to help us. And then we think up North, people that decide not to come in the restaurants, we still have a great carryout and delivery business.

Q: How much business has shifted to delivery and carryout? Will that be a long-term change?

A: We are now 39% carryout and delivery (up from 20% last year). Carrabba’s is a stitch higher than that because Italian food, as you can imagine, delivers so well. Now what has the pandemic done? It made current trends happen just that much faster. We saw, years ago, delivery and carryout would be a big part of our future, and we felt that we needed to be there. We invested heavily behind it and it really paid off when it came time to close down the restaurants.

Q: What other lasting changes do you expect from the pandemic?

A: I think people will continue to migrate to brands they trust and that are financially strong. If you have a strong business that offers great service and great food, has scale advantages, you’re going to be in a better place. And brand trust has always been a big issue... brand trust is going to be crucial as we go forward. So I’d say the off-premise nature of the business and convenience, I’d say brand trust in food quality and service and cleanliness and I would say financial scale and safety.

Q: You didn’t furlough any workers even when restaurants were closed. Why did you decide to do that?

A: We’re very proud of that. Our team actually gets emotional in the restaurants when I visit them because of that. We did it for two reasons. One, to help our country and help our employees because we felt it was the right thing to do and we had the financial resources to do it. And two, we knew that this would improve engagement and improve how people feel about the company. And if they’re already on our payroll, when we turned the restaurants back on, they would be there. We wouldn’t have to go out and hire a completely new team.

Q: Thousands of small restaurants received Payroll Protection Program (PPP) loans from the federal government earlier this year. But in many cases, the money has run out, and restaurants continue to struggle. What would you like to see the government do to help the industry?

A: The big companies should not get help. If you happen to be in a chain that wasn’t properly capitalized or whatever, that’s your decision. When the PPP came out, we never pursued it. We have resources in the capital markets to address this. So I do think, given the pain that this has caused to thousands and thousands of people and independent restaurants, I would hope that our government would take a look at that and provide some assistance to the independent restaurant companies that are out there.