Even chain restaurants have to continually reinvent themselves to stay fresh with customers. That means menu innovation, and evolving the concept.
“The lifeblood of the restaurant industry is new items. You need something to speak about,” Panda Restaurant Group Chief Supply Chain Officer Roland Ornelas told Restaurant Dive, adding, “You have to really focus on that value to guests — but you also have to steal customers from your competitors.”
It’s not just a question of change for change sake, but also executing in way that makes sense to customers.
Outback Steakhouse, a 38-year-old chain, has struggled in recent years with its menu, its execution, and keeping customers coming back. That led to Bloomin’ Brands deciding to close some restaurants while overhauling most of the rest of the chain.
Outback Steakhouse closes restaurants
“This year, we completed a detailed review of our restaurant base and identified 21 underperforming restaurants, which we closed last week. We also identified 22 restaurants in which we would not renew the lease,” Bloomin’ Brands CFO Eric Christel shared during the company’s third-quarter 2025 earnings call.
The company closed the first 21 locations in 2025, with many of the remaining shutdowns taking place this year.
“Most of those leases expire in the next 4 years. Our goal is to focus our resources on the remaining healthier restaurants,” he added.
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Part of Outback’s challenge has been losing its perception as a value brand.
“It has lost share to steakhouse competitors such as Texas Roadhouse and LongHorn Steakhouse, which have been two of the best performers in casual dining in recent years. And it has had a particularly hard time attracting customers with household incomes below $100,000. Outback’s leadership thinks value is a big reason for that,” according to Restaurant Business.
The chain’s overhaul includes a renewed focus on the menu, offering customers value, and improving execution, according to comments during the company most recent Q1 earnings call.
Service speeds have been inconsistent, and food quality has varied from visit to visit. That’s anecdotal, but it’s in line with comments the company has made about what needs to be fixed at the family-friendly steakhouse chain.
The chain’s customer satisfaction and value scores later reflected many of the same concerns.
“Our strategy is based on 4 strategic platforms, which are to: one, deliver a remarkable dine-in experience; two, drive brand relevancy; three, reignite a culture of ownership and fun; [and] four, invest in our restaurants,” he said.
Those efforts paid off quickly.
Outback’s guest metric scores increased year over year for the third consecutive quarter. In Q1 of this year compared to Q1 of last year, Outback’s brand trust increased by 4 points, guest scores increased across service by 6 points, value by 5 points, atmosphere by 5 points, food by 4 points, and intent to return by 4 points, Spanos said during the Q1 earnings call.
The steakhouse chain saw a 0.3% drop in comparable sales, according to the company’s first-quarter earnings release. That’s an improvement over the 0.6% drop in Q4 and the 0.5% loss in same-store sales for all of 2025.
Outback Steakhouse is undergoing a turnaround. Shutterstock
Outback faces a challenging market
“Casual dining chains like Outback are facing a more difficult environment at the moment, as Americans face cost increases elsewhere in their budgets and, as a result, are becoming much more discriminating in where and how they dine out. A few chains, including Texas Roadhouse, Applebee’s, and Chili’s, have benefited, while others — including Outback and other Bloomin’ brands — are losing share,” The Motley Fool’s Matthew Benjamin wrote.
Outback Steakhouse falls into a category that has faced a challenging operating environment.
“Black Box Intelligence data revealed that 9% of full-service restaurants are at risk for closure this year, with the shuttering of casual dining chains continuing to outpace openings,” the company said in a recent report shared with Restaurant Dive.
The segment has seen more than a 3% drop in net unit growth since 2022, the report said.
“In an environment where cumulative inflation has driven costs up by nearly a third since 2019, it is virtually impossible for a unit to remain viable after losing 30% or more of its peak sales,” Victor Fernandez, Black Box Intelligence vice president of insights and knowledge, said in a statement.
S&P Global sees Outback Steakhouse as facing a significant challenge to return to growth.
“Bloomin’ expectations show flat revenue and declining system-wide sales, with meaningful drops in operating income, due to ongoing traffic softness and international exposure challenges, which the company highlighted in recent earnings,” according to S&P Global.
