Outback Steakhouse is hoping more value will get more customers back into its restaurants.
The 669-unit Australian-themed steak chain is currently offering three-course meals starting at $14.99—its lowest-priced special of the year—as it looks to reverse traffic declines that have stung most of the casual-dining segment.
Same-store sales at the chain fell 0.1% year over year last quarter due to demand being “softer than expected,” parent company Bloomin’ Brands reported Tuesday. Traffic was down 3.8%. Bloomin’ CEO Dave Deno said customers have become more choosy after several years of rapid inflation. Outback is making more of an effort to become a restaurant they will choose.
That includes the $14.99 Aussie Aussie Aussie deal, which includes soup or salad; an entree and side; and a slice of cheesecake. It will be followed by more value-based offers throughout the rest of the year, though Outback will avoid the deep discounting strategy being used by some competitors, Deno said.
Early results for Aussie Aussie Aussie have been positive, he said, though he declined to go into detail. Outback expects same-store sales for the current quarter to land between flat and negative 2%, and it downgraded its guidance for the full year. It’s now expecting same-store sales to be flat to down 1%, from flat to up 2% prior.
Besides weathering current industry headwinds, Outback is also working on some initiatives designed to help the brand longer-term.
One of them is a smaller, simpler menu. It will feature existing “higher satisfaction” items as well as unique new items and will focus on abundance and value.
“Taken together, this will likely result in a more simplified menu at Outback with fewer items and higher value,” Deno said.
Outback has also invested in new grills and handheld ordering tablets for servers. Both have been fully rolled out and are having an impact. Steak accuracy has improved by 5% over the past year, and customer experience consistency is up 5%.
“We know that over time, this level of improvements will help drive same-store sales growth,” Deno said.
And Bloomin’ is remodeling restaurants and opening new ones across its four brands. It will remodel 60 to 65 units and open 40 to 45 new ones this year, including 15 Outbacks. Deno noted that new restaurants have shown good returns.
That comes alongside plans to close 41 underperforming locations, most of which are Outbacks.
As for Bloomin’s other brands, all experienced same-store sales declines except Carrabba’s Italian Grill, where same-store sales rose 2% year over year.
Bonefish Grill sales fell 2% and Fleming’s Prime Steakhouse & Bar’s sales fell 1.1%. Same-store sales in Outback’s Brazil business fell 1.1%.
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