Outback Shrinks Dining Room in New Outlets to Save on Construction Costs

Outback has become the latest restaurant chain to unveil a new prototype with a smaller footprint that will be the model for up to 100 new stores.

Bloomin’ Brands, owner of the Australian-themed steakhouse chain famous for its bloomin’ onion appetizer, announced its growth strategy during a quarterly earnings call last week.

The new 5,000 SF restaurant prototype is 16% smaller than a traditional Outback Steakhouse, but an “optimized” dining room will give it roughly the same number of tables, as well as a dedicated space for to-go orders.

Most important to Outback, the new restaurant design will enable the chain to reduce the cost of building new restaurants by about 20%, according to Mark Graff, Bloomin’ Brands SVP of Business Development.

In the 10 years prior to the pandemic, Outback lost about 10% of its portfolio of restaurants, going from 775 units in 2011 to 694 last year. However, according to CEO Dave Deno, strong performance by the steakhouse chain during the pandemic—led by an aggressive off-premises business as what Deno labeled “better operations and food”—has Outback poised for new growth.

“Even though we were very sad to see what came out in the restaurant business during COVID, we came out in a much stronger place. Our unit growth opportunity now is very good,” Deno said during the earnings call.

Deno cited several markets he said are ripe for an expansion by Outback, including Florida and Texas.

Several fast food chains have introduced prototype restaurants with smaller footprints for in-person dining as the industry focuses on processing off-premises orders, anticipating that consumer preferences for drive-thru, takeout and third-party delivery will remain strong as the pandemic wanes.

Hardee’s recently unveiled a 2,500 SF prototype of a smaller restaurant that eliminates about 25% of its traditional in-person dining seating capacity. The chain is adding a walk-up window for third-party deliveries as well as multiple drive through lanes.

Tim Hortons, the Canadian donut shop chain, is planning a string of new US restaurants that will feature a smaller footprint, faster build times and an “optimized” menu that focuses on hot breakfast sandwiches.

In a recent earnings call, Tim Hortons parent company Restaurant Brands reported that more than one-third of the company’s Q4 sales were made digitally.

Restaurant chains built around in-person dining also are introducing smaller outlets that cater to takeout and delivery orders. TGI Fridays has a new “Fridays on the Fly” prototype, a 2,500 SF outlet with limited indoor dining.