Outback Steakhouses of the future won’t be as big as the outback itself.
Like many casual dining chains, Outback is looking to 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 around 5,000 square feet.
These new, more compact locations will include smaller kitchens and expanded pick-up areas for takeout and delivery.
“Outback is a 34-year-old brand with a pretty big national footprint,” Brett Patterson, president of Outback Steakhouse, said in an interview with CNN Business. “The brand resonates quite well in smaller markets, but to continue growing we wanted a more accessible prototype.”
The chain’s owner, Bloomin’ Brands (BLMN), said in its latest earnings report that off-site sales – meaning takeout and delivery – accounted for 29% of its revenue. Outback 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 for stay: “The consumer is not going back to the way he behaved a few years ago”.
And that’s what’s informing the Outback to rethink its restaurants. The new locations have dedicated space for pick-up orders, and kitchens will include “entirely new equipment” that can better handle increased offsite orders, Patterson said, including clamshell grills that allow the kitchen staff to cook steaks in half the time.
As for diners, one of the biggest aesthetic changes they’ll see is the bar: Once shaped like a horseshoe in the center of the restaurant, the new bars have been pushed back against the wall. Patterson said they made up around 70% of the seating compared to the bar’s previous layout, but were still a “focal point” due to a refreshed design and visibility from the entrance.
Outback also conducted a “table efficiency study” and found that they needed fewer four-top tables. The chain therefore exchanged them for tables with two additional trays while still being able to accommodate 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 considering 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 and 100 new restaurants in the coming years. The projected growth follows a decade of decline, with the number of its US locations falling 10% from 775 to 694, according to catering consultancy Technomic.
“Over 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 latest quarter. This follows the success of other large chains, which have fared much better than smaller restaurants and independents, largely due to easier access to cash and the ability to rely on parent companies to show the way to strategic changes.
In 2021, the top 500 restaurant chains accounted for 63% of total restaurant sales in the United States, up from 58% in 2019, Technomic said.