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Bloomin’ Brands’ Remodeling Initiatives Should Grow Its Revenue


Mar. 19 2015, Published 10:42 a.m. ET

Initiatives to grow revenue

Restaurants often use several strategies to increase same-store sales and revenues. Menu innovation has been a constant effort at several restaurants, such as Bonefish and Carrabba’s, Olive Garden, under the umbrella of Darden Restaurants (DRI), Chili’s, under the umbrella of Brinker International (EAT), Texas Roadhouse (TXRH), and several other restaurants included in the Consumer Discretionary Select SPDR ETF (XLY), which holds 37% of retail stocks.

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Menu innovation and sales leverage

Bloomin’ Brands (BLMN) also introduced a lighter (under 600 calories) and gluten-free menu to appeal to health-conscious customers. The company also plans to roll out lunch programs at Outback and Carrabba’s. This strategy should help increase customer traffic. Currently, 61% of Outback locations and 55% of Carrabba’s locations offer lunch. The company plans to take both numbers up to 70%.

Restaurant remodeling

The company also completed its remodelling of about 79 of its restaurants in the last 12 months. Several restaurants are focusing on changing their images by remodeling their existing stores. Burger King (QSR), for example, aims to remodel about 40% of its US and Canadian restaurants by the end of 2015.

The casual restaurant Chili’s, under the umbrella of Brinker International (EAT), remodeled 80% of its company-owned restaurants in 2013. DinEquity (DIN), which operates the family and casual restaurants Applebees and IHOP, also remodeled more than 500 of its restaurants in 2013. About 96% of these two restaurants are located in the US. Bob Evans (BOBE), which had 560 restaurants at the end of 2013, remodeled 195 of its restaurants during the quarter.


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