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Outback Steakhouse has always had a formula for success. From its tiny beginnings in 1987, to

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Shyamal Patel October 13, 2005 MGTG 200 Professor Goldberg Thursday 5:20 Outback Steakhouse Case 1) What are the standout business and economic characteristics of the restaurant industry? * Restaurant-industry sales are forecast to advance 4.5% in 2003 and equal 4% of the U.S. gross domestic product. * The overall economic impact of the restaurant industry is expected to exceed $1 trillion in 2003, including sales in related industries such as agriculture, transportation and manufacturing. * Food and Drink revenues were estimated at $426 billion. * More than seven out of 10 eating-and-drinking places are single-unit (independent) operations. * The restaurant industry employs an estimated 11.7 million people, making it the nation's largest employer outside of government. * The restaurant industry provides work for more than 9 percent of those employed in the United States. * Restaurant industry employment was expected to reach 13.3 million by 2012. * Eating-and-drinking places employ more minority managers than any other industry. * Two-thirds of supervisors in 2000 were woman, 16% were African-American, and 13% were Hispanics * A typical household spent $2,116 on food away from home. * The largest spenders in the industry had a household income of over $70,000 ages between 45-54 and children over 18. 2) What are the key success factors in the casual dining portion of the restaurant industry? ...read more.


These two tests are requirements for every level of employee, down to the busboys. But because Outback is a steakhouse, steaks make up 55 percent of the chain's sales. Reliance on steaks in a world where cholesterol and fat awareness is at an all-time high could be a weakness for Outback. Furthermore, Outback's insistence on top-quality food products results in food costs that are higher than those of most competitors. Therefore Outback must either deal with lesser profit margins or charge their customers higher prices for meals, an option that is definitely not attractive to diners. Currently the average check price at an Outback restaurant is $18. Despite the fact that sales have risen, Outback stock has slid due to fears of overexpansion. Outback has invested in the Carrabba's Italian Grill chain as well as having entered into joint ventures for three other restaurant concepts. Join ventures like that with Carrabba's are an attractive opportunity for growth for Outback. In the Carrabba's deal, Outback pays construction costs and splits earnings with Carrabba's. Finally, Outback officials recently announced plans to open one of the company's Australia-themed restaurants in Australia. It has been a long time coming, as the company has been in business for 13 years and has yet to move into the country that inspired its existence. ...read more.


Also the restaurant industry faced various federal, state, and local laws. Each restaurant was subject to alcohol licensing and regulations by certain government authorities. Each restaurant establishment needed to apply to a state to for a permit to sell alcohol. In addition to the other issues and condition, there were control regulations put in place for daily operations, which also included minimum age of patrons and employees, house of operations, advertising, wholesale purchasing, and inventory control. 7) What recommendations would you makes to Harry Gauntlett to keep increasing sales and profit margins in his stores? The recommendations I would make to Harry Gauntlett is pretty simple. I would higher prices of meals two to three dollars per meal, but also keep his niche which is a customer friendly, high quality meal, "no rules" environment to dine in. This recommendation would not only keep his customer cliental but also increase his customer base and increase his profit margins and sales. Outback Steakhouse is unique for its quality and taste of food, and its casual dining atmosphere. That uniqueness will allow Outback to increase its price without losing customers. Also according to the restaurant industry trends, the majority of people that eat out have an annual income of $70,000 or more. Raising the price a couple of dollars will not hurt many of Outback Steakhouse customers financially. Therefore, raising prices would be very beneficial to Harry Gauntlett and the company's shareholders. ...read more.

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