The evolution of Outback Steakhouse

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The evolution of Outback Steakhouse
Outback Steakhouse is preparing for a period of significant expansion in Australia.

The global Outback Steakhouse brand has serious expansion plans for Australia, aiming to capitalise on its family-friendly reputation and the diner’s growing appetite for casual, high quality food offerings.

For the most part, what you see is what you get at Outback Steakhouse. It’s pretty obvious from the name that the menu is protein-driven, and the locations and layout make it clear that families are the target market. It’s a familiar, comfortable concept that has grown slowly but surely since launching in Australia in 2001.

What is surprising, however, is the business’ commitment to being as hands-on as possible with its produce. It hasn’t always been the case, but as Australian diners have become more sophisticated, so too have the back of house processes at Outback Steakhouse.

“We’ve asked all our chefs to almost be butchers in their own right,” said operating partner, Manny Rosenberg. “We bring in the sub-primals and we cut all our own steaks, except for the T-bones; we’re not bringing in our steaks cut for us. We do everything in-house now.

“We make all our own sauce, all our own dressings, and all our items for the salads … We’re very serious about our flavours and we’re very serious about our food. I know it’s cliché and a lot of people say they’re bringing freshness to the table, and a lot of people are. We are too. Freshness is really the word for what we do.”

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Of course the business needs to turn a profit, but this can’t be at the expense of flavour, Rosenberg said. While, in some cases, it would make sense to buy certain ready-made products in bulk, it’s a risk the management team isn’t prepared to take.

“I’ve tasted some of our competitors’ ranch dressing, and you can taste the difference. If you had them side by side – actually, you wouldn’t even need them side by side, you could have them weeks apart – you know the difference.

“Saving money drives our business, absolutely. But you need to weigh it up against the quality of the product. Sometimes we have some items on the menu that aren’t making as much as we’d like them to be, but we’re a steakhouse and we must have certain products on our menu. Pork ribs is one example. The price has gone through the roof, but the customers know our pork ribs and we can’t take them off just because they don’t meet our return to net. So we take a little hit on that; we don’t make much money on it, but those people [ordering ribs] aren’t coming in by themselves,” said Rosenberg.

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The more sites the business opens, the better its buying power. Outback Steakhouse deals directly with its meat suppliers and sets a price for its beef for the year, giving the restaurants both consistency and security. In order to get the most benefit from this arrangement, however, chefs need to eliminate as much wastage as possible.

“The benefit is certainly that we can buy it in at a better price, but the key is making sure your cutting percentages are accurate. Our chefs need to be able to trim and cut the product without loss. If we’re miscutting or mistrimming, we’ve given up any profitability that was there. As you know, there are very fine lines in our industry.”

Where to next?

Outback Steakhouse’s expansion plans are focused on south east Queensland, with the business recently announcing it signed a lease with AMP Capital to take on a 635 square metre site in the new redevelopment of Pacific Fair, Broadbeach on the Gold Coast.

“We have quite a lot of shopping centre developers approaching us now, which we previously haven’t had,” said Rosenberg. “And there are two parts to that. One is our reputation; we have a good reputation in the community. And two, the shopping centres feel that’s what they need to drive foot traffic … So while we didn’t consider that in the past, we’re strongly considering it as an opportunity now.

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Shopping centres will only form part of Outback Steakhouse’s growth strategy, however. The business is in lease negotiations with six other sites, none of which are located within broader complexes, and there’s also a couple that it’s hoping to buy.

The clincher when considering a new site, Rosenberg said, is parking. The restaurants target families and large groups, so if a location offers anything less than 100 car spots it’s disregarded.

“We need a site that’s at least 600 square metres. Six hundred and fifty is the average number we have. We need the right size, we need the right traffic flow, we have a big demand for parking, which is where some of our searches has fallen flat, even though the rent was great, the site appeared great and the visibility was great.

“It would be great to be in certain spots towards the northern beaches in Sydney, but you need to find the right location, and it needs to have parking. When people say ‘location, location, location’, to us it’s parking, parking, parking.”

Considering that there are about 950 restaurants around the world, including 700-odd in the States, Australia is a relatively small market for Outback Steakhouse, but this may not be the case for long. Rosenberg expects that the business will be able to double the number of restaurants here over the next 24 months.

“Over the past 15 years we haven’t expanded as quickly as others, and that’s because we’ve been conservative and deliberate,” he said. “But now we’re ready to explode.”

 


 

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