TAMPA Fla. Outback Steakhouse’s closure last week of all nine corporate Ontario, Canada, restaurants was a market-specific move with no direct implication for other regions, officials of the 970-unit casual-dining chain said.
“Each market is expected to carry itself in terms of sales and profits, and Ontario specifically has had challenges,” Steve Nilsen, Outback vice president of international marketing, said in a statement to Nation’s Restaurant News. “An economic downturn and increasing cost of raw materials combined to put pressure on profitability in Ontario.”
Asked if Outback has closed multiple units in any other markets in recent days, or if it had plans for additional closures, he noted that he cannot comment on future plans for the company, “except to say that this is not the first time restaurants have closed.”
“We always have to look after our Outbackers [employees] and customers, and the long-term health of the company requires the occasional closing,” Nilsen said. “It is a natural consequence of operating so many restaurants in so many markets.”
As of Dec. 31, Outback listed 689 corporate and 107 franchised or joint-venture Outback restaurants in the United States and 129 corporate and 53 franchised or joint-venture outlets in 20 foreign countries.
The March 23 shuttering of Ontario restaurants came just weeks after Outback parent, OSI Restaurant Partners LLC, reported a fourth-quarter net loss of $506.4 million on a 10-percent drop in corporate revenue and millions in asset impairment charges for reduced goodwill and closed restaurants. For the year ended Dec. 31, the multi-concept company that operates or franchises 1,491 restaurants worldwide, posted a net loss of $739.4 million, compared with a loss of $22.6 million in fiscal 2007. Full-year revenues dipped 4.9 percent to $3.96 billion.
Nilsen said his company’s arrangement to have Canadian operator SIR Corp., which operates the Jack Astor’s and Canyon Creek concepts, accept gift cards from the closed restaurants was based on SIR’s “overlapping geographic coverage and several dining choices for our customers.” The Outback marketing executive declined to comment on whether Outback would reimburse SIR for the value of gift cards redeemed or if SIR had agreed to a lesser degree of reimbursement in exchange for the possible marketing benefit of driving new guests, if any, to its restaurants.
Contact Al Liddle at [email protected].
