Outback Steakhouse has been struggling for a while now.
I think we’ve all known this on some level for some time.
I mean, listen, it’s hard to be a chain steakhouse occupying that middle ground between the high-end steakhouses and the rest of the chains.
Outback has done a wonderful job of navigating that over many years!
But…
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Lately, it’s felt like Outback is off-kilter.
I think you can sense that whenever you go into a restaurant.
So I’ve spent some time researching and trying to figure out why.
Here are my seven signs that Outback Steakhouse is having issues:
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Outback has plans to cut nearly 20% of its menu in the next few months (I’ve previewed some of the likely changes here).
That’s not exactly a sign of confidence. I mean, I get that they’re trying to cut costs, but here’s the problem:
To achieve so many cuts, they’re likely getting rid of some pretty popular dishes. (As they have before.)
That could negatively impact the guest experience, setting up a spiral of reduced foot traffic –> more cuts –> more reduced foot traffic.
And relatedly…
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Outback’s parent company Bloomin’ Brands (which also includes Bonefish Grill, Carrabba’s, and a few other brands – but Outback is the crown jewel) closed 41 restaurants last February across its portfolio, but most of the closures were Outback Steakhouses.
It’s not usually a good sign when you start closing locations, plain and simple.
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Outback has posted declines in same-store sales (that is, revenue for restaurants that have been open for at least a year) for the last six quarters running.
Which means that, after posting revenue declines in Q3 and Q4 of 2023…they then posted additional declines off those lower numbers in Q3 and Q4 of 2024.
Not great!
But it’s the “why” that I think is really worth understanding.
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I don’t want to be overly negative here, but lately when I’ve gone to dine, my local Outback has looked a little…tired.
Not quite shabby, but not in exactly great shape. Worn, maybe.
That’s not really the kind of experience that gets people to open up their wallets, you know?
And this isn’t just me – management is actually planning to spend a bunch of money on remodeling Outbacks later this year, because clearly they’re seeing the same issues.
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I don’t have any way to “prove” this – but the dishes just don’t seem to be as good as they used to be.
And it may not even be that kitchen staff aren’t doing them as well…it may be that the supply chain or the recipes have just changed over time.
Plus, let’s face it, as Outback has gotten rid of some dishes and replaced them with others…I just don’t think they’ve generally been as good.
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I want to be clear – Outback’s $14.99 meal deal is absolutely fantastic. (Here’s a full breakdown with recommendations.)
And also – you’re not trying to get people in the door with $14.99 meal deals if you’re doing really well. It’s a sign to me that management recognizes that the value perception just is not there (especially compared to, say, Chili’s), so they’re trying to find ways to meet more spend-conscious consumers.
That’s great for customers…but again, it highlights that Outback isn’t exactly negotiating from a position of strength here.
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All this…and it also seems like Outbacks (at least the handful that I visit that are local to me) are perpetually understaffed.
Waits are long. Food sometimes comes out cold. All that kind of stuff.
Obviously there are lots of structural reasons for understaffing, none of which are specific to Outback…
And also, if employee retention is an issue, that’s another signal that Outback may be struggling a bit.
(And if it’s not an employee retention issue, why are they specifically understaffing to save on costs at the risk of the customer experience?)
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So there you have it – seven things I’m seeing that indicate Outback is having a hard time.
I’m curious – what do YOU think?
Are you seeing the same issues?
Or other issues I haven’t covered?
Let us know in the comments!
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