If you’re a fan of sizzling steaks from Outback Steakhouse, you must be surprised to see that several of their local restaurants have been permanently closed. On 23 February 2024, Bloomin’ Brands, the current owners of the restaurant chain, revealed that they had closed 41 underperforming locations, including Carrabba’s Italian Grill, Bonefish Grill, and Fleming’s.
The majority of these restaurants were older assets with leases from the 1990s and early 2000s. Bloomin’ Brands CEO David Neno said the closures hit Outback Steakhouse the hardest. They made the decision because of various factors, including poor sales, shrinking customer traffic, and costly investments in location improvement.
However, the company didn’t release any list of closed restaurants. According to various sources, it has been revealed that Outback locations in Pennsylvania, Iowa, and Hawaii were shut down.
On the other hand, Bonefish Grill locations in New Jersey and Virginia, plus three Carrabba locations in New York, were also shuttered. Keep reading the article to delve deep into this heartbreaking news of Outback Steakhouse closing restaurants.
What is Outback Steakhouse?
Before getting into the topic, let’s talk about the restaurant chain.
Outback Steakhouse is an American restaurant chain known for its Australian-themed casual dining and delicious steaks. Founded on 15 March 1988, it has over 1,000 locations in 23 countries throughout North America, South America, Asia, and Australia.
Its first location was opened in Tampa, Florida, by Bob Basham, Chris T. Sullivan, Trudy Cooper, and Tim Gannon. Bloomin’ Brands, a restaurant holding company that owns several American casual dining restaurant chains, currently owns the restaurant chain.
Outback Steakhouse is known for its bold flavors and family-friendly dining atmosphere. It offers a mouthwatering menu with steaks, seafood, chicken, ribs, salads, and various sides.
The restaurant’s offerings draw attention from the Australian Outback and are primarily influenced by American tastes, making it a popular choice for casual dining.
Reasons Behind Outback Steakhouse Closing Restaurants
There could be several reasons behind restaurant closures, including financial difficulties, fewer customers, and increased competition. Economic downturns can reduce disposable income, leading to decreased consumer spending.
Rising costs, such as rent, labor, and resources, can drain profitability. Additionally, operational challenges, such as poor management or failure to adapt to market trends, can lead to a restaurant’s decline.
Bloomin’ Brands CEO David Deno said they closed 41 locations because of poor financial performance, shrinking customer traffic, and costly investments in improving these locations.
Let’s discuss these reasons briefly below;
1. Poor Financial Performance
One primary reason Outback Steakhouse closed restaurants is poor financial performance. Despite the restaurant chain’s widespread recognition and a loyal customer base that appreciates its Australian-themed American cuisine and dining experience, 41 Outback locations have been unable to maintain profitability.
The poor financial performance could be due to reduced revenue, shifting consumer preferences, and the rising costs of managing a restaurant. Outback struggled to make money in the fourth quarter, sliding 0.3%.
However, Bonefish’s location fell 3%. On the other hand, Carrabba’s was actually a bright spot, which also experienced a 2.5% downfall. Last quarter, Bloomin’ Brands netted $43.3 million, less than last year’s net of $58 million.
It has created a financial environment where these Outback locations can’t sustain themselves, leading to the unfortunate decision to close their doors.
However, it was not the first time the restaurant chain had closed several of its locations. In its early years, it closed nine locations in Canada due to poor economic conditions.
2. Shrinking Customer Traffic
Shrinking customer traffic is another major reason behind the closures. This could be due to shifts in customer preferences, increased competition, negative reviews, or a decline in food or service quality.
As fewer customers dine at restaurants due to these reasons, the revenue generated becomes insufficient to cover operational costs. As a result, the restaurant chain is forced to shut down underperforming locations to minimize financial loss.
3. Costly Investments in Improving Restaurants
Investing in the renovation and improvement of restaurants is often seen as a strategy to rejuvenate a brand and attract more customers to stay competitive in the rapidly evolving restaurant industry.
However, these upgrades can be extremely costly, involving significant expenditures on interior design, kitchen equipment, technology upgrades, and marketing to promote the revamped locations.
When the financial benefits do not justify these hefty costs, the Outback locations start facing a substantial financial burden. That is why the restaurant chain decided to close down several of its locations.
List of Outback Steakhouse Restaurant Locations That Were Closed
Unfortunately, the restaurant chain didn’t release the list of closed restaurants. However, several reports revealed that Outback locations in Pennsylvania, Iowa, Illinois, Michigan, Florida, Ohio, and New Hampshire were shut down.
On the other hand, three Carrabba locations in New York and Bonefish Grill locations in New Jersey and Virginia were also closed.
Impact of Outback Steakhouse Closing Restaurants on Employees
Closures of any company often result in job losses for employees who have dedicated their time and effort. These individuals may find themselves facing the uncertainty of securing new positions in a competitive world.
Losing a job can be particularly challenging for employees who have been with the company for an extended period. The same goes for the employees at Outback Steakhouse.
But the restaurant chain workers are relieved. They told a news channel that the closure decision does not reflect on the staff members or their service.
They added that most of the employees will have the opportunity to work at other locations, and those who do not will receive severance. This support may help ease the financial burden during the transition period.
How Did the Closure Decision Affect Customers?
If you’re a regular customer of one of the Outback locations that is being closed now, you’ll miss the welcoming Australian-themed casual dining experience. You’ll miss the Outback Steakhouse mouthwatering menu items, including Victoria’s Filet Mignon, Outback Center-Cut Sirloin, Bone-in New York Strip, Perfectly Grilled Salmon, Outback Ribs, Grilled Chicken on the Barbie, and a variety of sides and salads.
These locations were not just places to eat, but are often deeply embedded in the community, where families gather for celebrations, and friends meet for casual night out. However, after the closure of these restaurants, customers have to find another Outback location or explore alternative dining choices.
What is Outback Steakhouse Planning For the Future?
After the 41 Outback locations close, Outback plans to open 18 new restaurants in the US by the end of this year. The company has also reflected a redesigned restaurant layout that it unveiled in 2022.
There are already 700 restaurants of this design across the US. In addition, Bloomin’ Brands plans to open 45 restaurants across all of its brands in the coming year.
Frequently Asked Questions
1. Why is Outback Steakhouse closing some restaurants?
Outback Steakhouse is closing some locations due to financial challenges, market conditions, or underperformance of specific restaurants.
2. Which Outback Steakhouse locations are closing?
The specific locations that are closing can vary, and it’s best to check with local news sources or the official Outback Steakhouse website for updates.
3. Will all Outback Steakhouse locations close?
No, only selected underperforming locations are closing. Most Outback Steakhouse restaurants will continue to operate as usual.
4. What happens to employees at closing locations?
Employees at closing locations may be offered positions at nearby Outback Steakhouse restaurants or provided with severance packages.
5. Can I still use my gift card if a location closes?
Outback Steakhouse gift cards can be used at any remaining locations or other restaurants within the Bloomin’ Brands family.
6. Is there a way to find out if my local Outback Steakhouse is closing?
Contact your local Outback Steakhouse directly or check their website and regional news for closure information.
Wrapping Up
The closure of Outback Steakhouse locations reflects broader trends and challenges within the restaurant industry. While the immediate impact on employees and customers is significant, the company’s strategic adjustments and plans may help it navigate these changes and thrive in a competitive market.
For now, fans of Outback Steakhouse may need to adjust their dining habits and monitor the company’s evolving strategies.
