Outback Steakhouse Closes 21 Restaurants Suddenly

In a strategic shift, Outback Steakhouse’s parent company, Bloomin’ Brands, has unexpectedly closed 21 locations this October. This decision is part of a broader turnaround strategy to enhance its competitiveness against trendier dining options.

Details on Closures and Future Plans

Alongside the immediate closures, Bloomin’ Brands plans not to renew leases for an additional 22 restaurants across its three major chains, which include Carrabba’s Italian Grill and Bonefish Grill. The remaining Outback Steakhouse outlets, currently numbering around 670 in the U.S., reflect a significant decline, down roughly 10% from 750 locations a decade ago.

Financial Implications of the Changes

To address these changes, Bloomin’ Brands will incur a $33 million impairment charge. Additionally, the company has suspended its shareholder dividend to finance the restructuring efforts. Over the next three years, Bloomin’ Brands will invest $75 million into the Outback Steakhouse revitalization plan.

• This investment will feature enhanced menus that emphasize improved steak options.
• Outback aims to increase value offers to attract more customers.
• They are also reducing the number of tables served by each waiter from six to four to improve service quality.

Enhancements to the Dining Experience

CEO Mike Spanos emphasized the brand’s strong equity, stating it has a tremendous opportunity to drive restaurant visits. By the end of 2028, all remaining locations will undergo renovations featuring brighter interiors and new seating arrangements.

The redesign includes smaller kitchens and expanded pickup areas to accommodate modern dining preferences.

Market Competition and Consumer Behavior

Outback Steakhouse has faced considerable challenges over the past two years, with the latest quarter showing only a modest 0.4% increase in same-store sales. In contrast, competitors like LongHorn Steakhouse and Texas Roadhouse reported sales growth of 5.5% and 5.8%, respectively.

As consumers become more discerning in their dining choices, they tend to favor chains that offer better value. This trend has benefited rivals like Chili’s and Applebee’s, which focus on value-oriented offerings.

As of now, Bloomin’ Brands’ stock has decreased by 40% since the start of the year, reflecting the challenges faced in maintaining market share.