Outback Steakhouse latest to go lightOutback Steakhouse latest to go light

Ron Ruggless

TAMPA Fla. Outback Steakhouse, known for its signature Bloomin’ Onion appetizer at a hefty 1,565 calories, will introduce this month five menu items at less than 500 calories each.

The menu changes come amid the chain’s sluggish sales trends, and follow other casual-dining brands, like Applebee’s Neighborhood Grill & Bar and Romano's Macaroni Grill, which have most recently increased their attention on lighter fare.

Outback’s menu additions are part of what Elizabeth Smith, chief executive of parent OSI Restaurant Partners LLC, labels a year of “test and invest” for the company’s portfolio of 1,475 full-service restaurants. Outback’s new lower-calorie menu items will be identified by a printed symbol on the menu, creating customer awareness that those items can be ordered “light style.”

“We are not looking to deliver value through deep-discounting of our existing menu,” she said. “We’re talking about making sure we have the right affordability and variety.”

Smith became chief executive at OSI in November.

Most recently, systemwide same-store sales for the December-ended fourth quarter fell 6 percent for the 970-unit Outback Steakhouse chain, 3.6 percent for the 233-unit Carrabba’s Italian Grill and 5.7 percent at the 64-unit Fleming’s Prime Steakhouse and Wine Bar. The only positive performer for OSI was Bonefish Grill, which posted a 1.1-percent same-store sales result. OSI did not report results for the 24-unit Roy’s group, which it is seeking to sell.

Smith said OSI is also working on Outback’s overall brand and positioning, which includes an in-test restaurant renovation program.

“We think 50 to 60 percent of our stores are candidates for this renovation and upgrade and design,” Smith said. She noted that the cost per restaurant would total between $150,000 and $250,000.

At test units there has been a guest traffic increase of between 2 percent and 4 percent, according to Dirk Montgomery, OSI’s chief financial officer. He also noted that customer surveys scores on atmosphere and satisfaction also increased.

OSI also said it would look to improve affordability at Carrabba’s perhaps with smaller portions and lower price points. At Fleming’s, the “5-6-7” bar menu promotion, which features five appetizers, cocktails and wine at $6 each from 4 to 6 p.m. seven nights a week, may be expanded.

“Across the portfolio, we’re going to be adding variety of food and variety of price points … but it won’t be about taking existing items and deep-discounting them,” Smith said.

For the full year, OSI reported a net loss of $54 million compared with a net loss of $739.4 million for 2008, when it booked a $604 million goodwill impairment charge as well as $112 million for impaired assets and restaurant closings. Revenue for 2009 fell about 9 percent to $3.57 billion.

OSI was acquired in 2007 by an investor group that includes Bain Capital Partners LLC, Catterton Partners and company founders Chris T. Sullivan, Robert D. Basham and J. Timothy Gannon.

Contact Ron Ruggless at [email protected].