Struggling restaurant chain makes major menu, operational changes | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Inflation has hit some restaurant chains hard. Consumers have become more conscious of their spending, at least in some cases, and brands that aren’t perceived as offering good value have been hurt.

Fast-food companies and casual sit-down restaurant operators have responded to this by offering value menu items. Having a high-profile, high-value discount meal has helped change traffic trends at chains including McDonald’s and Chili’s.

Value, however, becomes a tougher proposition at brands that are already seen as a bit of an indulgence. Your meal might be a bit cheaper, but you’re still picking an option that’s going to be more expensive than other choices.

That’s a brand-perception issue for some chains, which may not be high-end restaurants but are also not positioned based on affordability.

Bloomin’ Brands (BLMN) Chief Executive Mike Spanos addressed that issue during his company’s fourth-quarter earnings call.

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“We are reducing our menu items in all brands, by 10% to 20%, in 2025,” he said. “We are removing low-satisfaction and low-mix menu items based on guest feedback and prep-labor complexity. We are moving away from our LTO strategy that included noncore menu items with discounts presented every 10 to 12 weeks.”

Instead of making limited-time offers at lower prices, his company will focus on overall value.

“We will transition to abundant value that is featured as part of our everyday menu offering,” he added.

He also noted that Outback Steakhouse, the company’s largest brand, would be the focus of a turnaround effort.

Chili’s has been a succesful turnaround partially by focusing on value.

Image source&colon; Shutterstock

Outback Steakhouse has struggled

“Our third priority is to focus on the turnaround at Outback Steakhouse. Outback is our largest and most important brand and I will spend the majority of my time focused on that business,” Spanos said.

Bloomin’ Brands has already worked on aspects of the Outback Steakhouse turnaround.

“Last year, we had many elements in test at an incubation restaurant with a focus on quality, value and the guest experience,” he said. “We are excited by the results seen in that lab restaurant and have now moved to test phase.”

The company has expanded its test stores.

“As of the end of February, we will have 14 restaurants in test,” he added. “We are measuring success by traffic lift, guest intent to return, Outbacker employee engagement and profitability.

“We have been leveraging Ziosks to provide real-time feedback. I have been personally involved in the test restaurants with our teams, and I am highly encouraged by the improvements.”

More restaurant news:

Ziosk is an on-table device that enables customers to order meals and pay their bills. About 80% of customers at restaurants offering the Ziosk technology have used it.

“We can measure guest satisfaction by restaurant and by shift,” Spanos said. “With features like pay at the table, tap to pay with mobile wallet and entertainment, Outback is offering guests a faster and simpler experience.

“We will have the rollout completed by the end of April, and are already seeing efficiencies with our staff as well as an improved guest experience in those restaurants.”

Outback offers value, not new menu items

Spanos made clear that offering new menu items was no longer a priority. As he shared above, the focus is on offering consistent value. He also said the goal was to simplify operations for Outback Steakhouse and its other brands.

“I’ve heard it loud and clear coming from our restaurants: We need to make it simpler for our operators to execute all aspects of the guest and team member experience. We need to make fewer items but make those much better,” he said,

Outback Steakhouse had its most successful promotion ever last year, using items already on its menu bundled for value.

“We’ve started with the Aussie 3-Course at Outback and are currently testing simplified menus and everyday value in both Carrabba’s and Bonefish,” the CEO said. “We will measure success based on the guest intent to return, building frequency of visitation and gross profit dollars.”

Which items stay and which ones go will be decided by customers, or at least customer behavior.

“We started by reassessing the menu satisfaction of all items, both on and off-premises,” he said. “We are improving, eliminating or replacing menu items that our guests consider subpar. We are retraining our standards to recipes and reevaluating cooking procedures to consistently provide the quality and flavor our guests expect from us.”