Outback Steakhouse, a popular fast-casual restaurant chain, has recently made the decision to shut down multiple locations across the United States. The parent company, Bloomin’ Brands, announced that they will be closing 41 underperforming restaurants, with the majority of these being older assets with leases from the ’90s and early 2000s.
CEO David Deno explained in a recent earnings call that the decision to close these locations was based on a variety of factors, including sales and traffic-trade areas, as well as the investment required to improve these restaurants. Despite this setback, Deno expressed confidence in the company’s overall portfolio and revealed plans to open 40 to 45 new restaurants by 2024.
While the closure of these restaurants is undoubtedly a difficult decision, Bloomin’ Brands made it clear that it was a business decision and not a reflection on the staff or their service. The company assured employees that many team members would have the opportunity to transfer to open positions at other restaurants, while those who could not would receive severance packages.
Although specific locations were not disclosed, local reports suggest that Outback Steakhouses in Iowa, Hawaii, Pennsylvania, Virginia, New Jersey, and New York were among those that have been shut down. This news comes at a time when other national brands, such as Burger King, Applebee’s, and Buffalo Wild Wings, have also closed numerous locations in recent years.
One possible explanation for these closures could be the impact of inflation on consumer spending. CEO David Deno acknowledged that higher inflation and interest rates have made consumers more cautious with their discretionary spending. However, he emphasized that some of Outback Steakhouse’s products offer customers great value and that the company will continue to be thoughtful in its approach to pricing and discounting.
Despite these challenges, Bloomin’ Brands reported a rise in revenues for the fourth quarter of 2023 compared to the same period the previous year. However, net income was 25 percent lower, indicating the need for adjustments to improve profitability.
While the closure of underperforming restaurants is undoubtedly a setback for Outback Steakhouse, it is important to note that the company remains optimistic about its future. With plans to open new locations and a commitment to providing value to customers, Outback Steakhouse is poised to bounce back from this setback and continue serving delicious meals to its loyal patrons.
