Tampa’s Outback Steakhouse planning up to 100 smaller restaurants
The next generation of Outback Steakhouses will be smaller. It’ll have new technology and more space devoted to carryout, delivery and even catering. And it might pop up in locations you wouldn’t expect.
After pivoting to takeout early in the pandemic, and later raising menu prices to keep pace with supply and labor inflation, Tampa-based Outback will embrace a redesigned style of restaurant in key markets like Florida, executives told investors on a quarterly earnings call Friday.
“Even though we were very sad to see what came out in the restaurant industry during COVID, we came out in a much stronger place, so our unit growth opportunity now is pretty good,” David Deno, the CEO of Outback’s parent company Bloomin’ Brands, said on the call. “And if you look at cities where we’re still really strong in the South, there’s still new unit expansion opportunities. So we’re looking at 75 to 100 new Outbacks in the U.S., and hopefully as time goes by, we can continue to make progress on that.”
The smaller restaurants have already been tested in Brazil, a major Outback market. There are around five in the United States so far. Deno described Tampa Bay as a prime candidate for the new stores, alongside cities like Miami, Dallas, Austin and Nashville.
“Florida’s a huge priority market for us, especially the Tampa Bay area,” Deno said in a phone interview with the Tampa Bay Times. “You might have an Outback 10 miles apart, but because of growing trade areas and density, we can drop in a restaurant. Tampa-St. Petersburg is an excellent example of that.”
The new restaurants will be about 5,000 square feet, down from an average of more than 6,000 today. It’ll have brighter, redesigned bar areas and dedicated space for off-site dining, which constituted 26 percent of Bloomin’ Brands’ revenue in early 2022. Earlier this month, the company announced it would offer catering services at nearly 500 restaurants nationwide.
Each restaurant will still seat an average of 200 customers, with some space savings in the kitchen and other back-of-house areas. And the new restaurants will embrace new technologies already coming to or in operation at existing Outbacks, including handheld ordering devices and simpler kitchen grills.
The biggest change might be where the restaurants pop up. Instead of new locations, Outback will look to move into closed restaurant sites in heavily trafficked retail areas with a “main and main location,” Deno said.
Moving into existing shells is expected to reduce build-out costs by 20 percent, and potentially more. Over the last five years, the company has relocated about 50 restaurants, said Mark Graff, Bloomin’s senior vice president of business development and financial planning. Those stores saw sales bumps of more than 35 percent.
“Importantly, we did this without compromising the guest experience or the number of tables,” Graff said.
Such restaurant shells are more common than they were before 2020. The National Restaurant Association estimates 90,000 restaurants have temporarily or permanently closed since the start of the pandemic. Outback and its franchisees operate more than 1,450 restaurants and stand-alone kitchens worldwide, about the same as in 2019.
“We’re going across the country and refreshing those restaurants as we speak,” Deno said. “We’ll continue to do that in the coming years. And so between that and the new units, we think we can have an elevated brand from where it stands today.”
Outback reported revenues of $1.1 billion during the first three months of 2022, up from $987.5 million a year ago. The company also reported higher net income and earnings per share, and upped its projected revenues for the year by about $50 million.
Bloomin’ Brands stock opened at $23.50 Friday, up $1.50 per share from Thursday’s close, though it had settled below $22 by 1 p.m.
