Outback Entering Its Second Prime... Focusing on Delivery and Premiumization

Opened 20 Delivery-Only Stores Last Year
Sales Increased by Over 30% Compared to Previous Year
Effect of Expanding Delivery-Only Menu and More

[Asia Economy Reporter Moon Hyewon] The first-generation family restaurant ‘Outback Steakhouse’ is enjoying its second heyday. The untact consumption trend triggered by COVID-19 has become normalized, leading to a rapid expansion of the delivery market. This demand is attracting not only the existing loyal customers in their 30s and 40s but also younger generations to offline stores.

According to the industry on the 21st, Outback opened 20 delivery-only stores last year. Including offline stores, the total reached 118, an increase of 22 from the previous year (96). Considering that about 110 stores operated during its prime, it is experiencing a second heyday.

Last year’s sales are estimated to be around 400 billion KRW, which is more than a 30% increase compared to the previous year (297.9 billion KRW). Operating profit also recorded a growth rate in the 30% range, expected to have surpassed 30 billion KRW.

As delivery demand increased due to COVID-19, Outback significantly expanded its delivery-only menu. As a result, delivery orders for Toowoomba Pasta, Outback Garlic Steak, and Double Mushroom Steak grew by 170% compared to the previous year.

Offline stores clarified their brand identity as a ‘steak specialty restaurant’ through steak premiumization. Accordingly, the premium menu ‘Tomahawk Steak’ surpassed 1 million cumulative sales by the end of last year. It is currently known to be sold at a rate of one per minute.

An Outback representative said, "Although strict social distancing continues, the number of customers visiting both online and offline stores is increasing, and the waiting list is getting longer. We will continue to explore various ways to expand touchpoints with customers."

VIPS, operated by CJ Foodville, is also transforming its store environment to focus on contactless and delivery services, aiming for a rebound opportunity. They are implementing a premium strategy by renewing existing stores into specialized stores such as ‘Premier’ and ‘Taste up+’. The number of VIPS specialized stores is 19, accounting for 70.4% of the total 27 stores.

TGI Fridays (TGIF), which was hit hard by COVID-19, is strengthening lunchbox menus such as All Day Box and focusing all efforts on expanding delivery services. TGIF, which led the heyday of domestic family restaurants in the 1990s, seemed to continue its growth after being sold to Lotte in 2002, but after 2010, as customers’ tastes became more sophisticated and market competition intensified, it eventually declined. On July 30 last year, Lotte GRS transferred the domestic business rights of TGIF to the food service company MFG Korea. Currently, 14 stores are in operation.

Professor Lee Eunhee of Inha University’s Department of Consumer Studies said, "Even if the spread of COVID-19 slows down, delivery is unlikely to shrink significantly. Expanding delivery will continue to be a positive business strategy. Offline stores are also expected to continue focusing on specialization and premiumization strategies."

This content was produced with the assistance of AI translation services.