Outback Steakhouse, with a smaller prototype, has big new real estate ambitions
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Apr 29, 2022

Outback Steakhouse is once again set to become a major player in commercial real estate.

Executives with Bloomin' Brands Inc., the Tampa-based parent company of Outback, say they've rightsized the chain's real estate with plans for a new prototype that's around 5,000 square feet. That's a reduction of 16% from the current model, Mark Graff, Bloomin' senior vice president of business development and financial planning, told investors on an earnings call on Friday.

It's also 20% cheaper to build, Graff said. He told investors that the company will build six Outback locations in 2022 and has 23 sites under contract. He said the company expects to double its development of new Outbacks in 2023.

The overall size reduction comes from a redesigned back-of-house, Graff said, and the new restaurants will have the same number of tables as the older model. The new prototype will also include a "brighter ambiance, redesigned bar and new decor package," Graff said, and will be built to support Outback's "strong" takeout and delivery business. New front- and back-of-house technology are key, particularly handheld point-of-sale systems that maximize servers' efficiency.

"With off-premise volumes averaging approximately 30% of sales, we added space to better accommodate this important sales channel," he said.

Florida, Texas and other Sunbelt markets are Bloomin's priority for new Outback stores, Graff said. The company will build new stores in rapidly growing markets and additional locations in major metro markets or "fill-in opportunities" and projects that the new stores will see annual sales volumes of $4 million to $5 million.

The last few years — including the Covid-19 pandemic — have set the table for this next wave of growth, Bloomin' CEO David Deno told the Tampa Bay Business Journal on Friday. Deno said the expansion could mean up to 100 new Outback locations in the next few years.

As casual dining chains struggled to remain relevant in a new era of fast-casual and independent restaurants, Bloomin' too struggled through the mid-2010s. For much of that decade, Bloomin' was closing restaurants and remodeling existing stores; new locations were a rarity.

By 2016, the company was investing heavily in technology to streamline its takeout and delivery options, and it was better positioned to navigate the pandemic than many of its competitors, emerging with stronger balance sheets and improving sales margins.

"We're in a stronger position to grow post-pandemic," Deno said.

Outback isn't Bloomin's only growth vehicle; Graff told investors that the company sees opportunity to open more Fleming's Prime Steakhouse and Wine Bar restaurants in Florida, Texas and California. New Fleming's locations see annual sales of $6 million, and the concept is among Bloomin's most profitable, Graff said.

The company is also "opportunistically" building new Bonefish Grills and Carrabba's Italian Grills in core markets, Graff said.

A newer version of Fleming's is under construction in Tampa's Westshore business district, not far from Bloomin's corporate headquarters.

"We are actively building the pipeline for growth," Graff said of Fleming's.

The new developments, Deno said, enable Bloomin' (Nasdaq: BLMN) to be a "net job provider to America." Existing locations may lose head count due to attrition — no job cuts are planned — but each new Outback location may create around 70 jobs, he said.

Bloomin' is also bringing new culinary technology to its kitchens, where Deno said steaks are still cooked "like it's 1989." He described new "clamshell grills" that can perfectly cook steaks to the customer's order — an initiative that's been in the works for two years and will be rolling out in restaurants in the coming months.

Upgrading Outback's kitchens with the new technology costs about $150,000 per location.

"Our biggest issue is steak accuracy — getting them cooked properly — and this goes a long way to fixing that," he said.