By Jordan Valinsky, CNN Business
Updated: Sat, 14 May 2022 13:08:54 GMT
Source: CNN Business
Outback Steakhouses of the future won't be nearly as expansive as the outback itself.
Like many casual dining chains, Outback is pivoting toward a post-pandemic future in which delivery and takeout orders are increasingly important to the bottom line. So the chain, known for its Bloomin' Onions and steaks, is reducing the size of its restaurants by 17% to clock in at about 5,000 square feet.
These new and more compact locations will include smaller kitchens and expanded pickup areas for takeout and delivery.
"Outback is a 34-year-old brand with a fairly large national footprint," Brett Patterson, president of Outback Steakhouse, said in an interview with CNN Business. "The brand resonates fairly well in smaller markets, but in order to continue to grow we wanted a more approachable prototype."
The chain's owner, Bloomin' Brands, said in its most recent earnings report that off-premise sales — meaning takeout and delivery — made up 29% of Outback's revenue in the fourth quarter, nearly double the last three months of 2019. The brand's delivery partnership with DoorDash in 2019 proved "very fortunate during the pandemic," Patterson said, adding that delivery is here to stay: "The consumer isn't going back to how they behaved a few years ago."
And that is what's informing Outback's rethinking of its restaurants. The new locations have a dedicated space for pickup orders, and kitchens will include "completely new equipment" capable to better handle the increase in off-premise orders, Patterson said, including clamshell grills that let kitchen staff cook steaks in half the time.
As for diners, one of the biggest aesthetic changes they'll see is the bar: Once a horse shoe-shape in the center of the restaurant, the new bars have been pushed back against the wall. Patterson said they comprise about 70% of seats compared to the previous bar layout, but are still a "focal point" because of a freshened up design and visibility from the entrance.
Outback also conducted a "table efficiency study" and discovered that it needed fewer four-top tables, so the chain swapped them out for additional two-top tables while still seating the same number of customers — 187 — as before. Smaller-format restaurants can also help Outback expand into cities where real estate is more expensive. Patterson said the brand is eying further expansion in Texas and the Southeast.
So far, four redesigned restaurants have opened in Texas, North Carolina and Ohio, and Outback aims to add between 75 to 100 new restaurants in coming years. The planned growth follows a decade of decline, as the number of its US locations has dropped 10% from 775 to 694, according to restaurant consulting firm Technomic.
"In the next few years, you'll see significantly more growth than in 2022," Patterson said.
Outback's resurgence comes after several quarters of positive results, with sales up 9.2% in its most recent quarter. That follows the success of other big chains, which have fared a lot better than small restaurants and independents, thanks in large part to easier access to cash and the ability to lean on parent companies to lead the way on strategic shifts.
In 2021, the top 500 restaurant chains accounted for 63% of total US restaurant sales, up from 58% in 2019, Technomic said.