Outback Closes 21 Restaurants Unexpectedly
Outback Steakhouse has unexpectedly closed 21 of its restaurants as part of a strategic overhaul aimed at staying competitive in the casual dining market. This decision, announced by Bloomin’ Brands, the parent company of Outback, comes as the restaurant chain faces increased pressure from trendier rivals.
Details of Closures and Future Plans
Alongside the recent closures, Bloomin’ Brands revealed that an additional 22 locations will not have their leases renewed over the next four years. Currently, Outback operates approximately 670 locations in the United States, a decrease of about 10% compared to a decade ago when it boasted around 750 outlets.
Financial Implications
To address the financial impact of these closures, Bloomin’ Brands announced a $33 million impairment charge. Additionally, the company has suspended its shareholder dividend to support a comprehensive turnaround plan, which involves an investment of $75 million over the next three years.
Enhancements in Customer Experience
As part of the turnaround strategy, Outback plans to introduce new menus that emphasize improved steak offerings. The chain is also working to enhance the dining experience by:
- Increasing value offers
- Reducing the number of tables each waiter serves from six to four
All remaining Outback restaurants are set to undergo renovations by the end of 2028. These upgrades will feature brighter interiors, a redesigned bar, new seating, smaller kitchens, and expanded areas for pickup services.
Challenges in the Casual Dining Sector
Outback has faced challenges over the past two years, struggling to maintain same-store sales. This quarter marked a slight improvement, with sales rising by just 0.4%. In contrast, competitors like LongHorn Steakhouse and Texas Roadhouse reported sales increases of 5.5% and 5.8%, respectively.
Consumer preferences have shifted, with diners becoming more selective about where they choose to spend their money. As a result, chains that offer larger portions and better value, such as Chili’s and Applebee’s, have gained traction
Company Outlook
Despite these difficulties, Outback’s CEO, Mike Spanos, remains optimistic about the brand’s potential. He emphasized the brand’s strong equity and awareness, aiming to convert this recognition into increased restaurant visits.
Bloomin’ Brands’ stock has experienced significant declines, losing 40% of its value since the start of the year. The company hopes that its new strategies will reverse this trend and reinvigorate the brand.
