Dive Brief:
- Outback Steakhouse’s same-store sales declined 0.1% during the second quarter, while parent company Bloomin’s overall U.S. same-store sales also fell 0.1%, according to an earnings release.
- Outback has posted same-store sales declines over the past four quarters after a four-quarter streak of positive same-store sales from Q3 2022 through Q2 2023, according to earnings data.
- Bloomin’ is working to create sustainable growth at Outback and is “making progress in improving the guest experience, providing meaningful value, and enhancing customer and digital capabilities,” CEO David Deno said in the release.
Dive Insight:
Declines in traffic as customers cut back on spending have pushed Outback’s casual dining competitors, like BJ’s and Denny’s, to focus on ways to boost traffic. Denny’s plans to bring back a highly popular value platform, while BJ’s is enhancing throughput through a hospitality initiative. In April, BJ’s rolled out a new staffing model that allows servers to get to guests sooner and send orders to the kitchen and bar faster. The chain is also looking to update its kitchen display systems to further improve throughput.
Outback is deploying similar strategies, as overall traffic across Bloomin was down 3.8%. The brand is enhancing its service model and has added new grills and server handhelds across its system. The chain will continue to invest in additional technology and equipment, Deno said Tuesday during an earnings call.
Customer satisfaction scores have improved in recent quarters, with steak accuracy up 500 basis points alongside a 500 basis point improvement in consistency of experience over the past year, Deno said. The chain’s scores on friendly service and food quality scores lead its peers by 290 basis points and 40 basis points, respectively.
“We know that over time, these level[s] of improvement will help drive same-store sales growth,” Deno said.
Outback Steakhouse U.S. same-store sales
Outback is also working to simplify its menu by, reducing the number of items and emphasizing menu items that have higher satisfaction levels with guests. It plans to add differentiated items with strong value, Deno said. This work is currently underway, though management didn’t expand upon these details.
Outback has already seen some success with recent value offerings. Its current limited-time offer has an entry point of $14.99 and offers a three-course meal. Promotional offerings like these can help drive traffic during challenging times, Deno said.
“We are not adjusting our strategy to go after deep discounting, rather we feel this is the best for the strength and the health of the brand long-term,” Deno said. “We are focused on delivering offerings that are only available at Outback.”
The chain is working to improve its competitive advantage through digital marketing and other advertising. To do that, Bloomin’ is using a multi-channel advertising strategy that leverages analytics to ensure “strong returns and maximize” its reach, Deno said, adding that management wants to develop a better way to “communicate, engage and motivate our guests.”
In addition to these three top priorities, Outback is also focused on building its unit count and remodeling its existing base. Bloomin’ expects to remodel 60 to 65 Outbacks and open 40 to 45 new units this year, Deno said.
“We know that upgrading our assets is a big part of improving traffic trends, especially at Outback,” Deno said. “In addition, we are achieving good returns from our new restaurants and relocations.”
