[The Rise and Fall of Family Restaurants] The Success Secrets of 'Outback·VIPS' Are Strengthening Delivery and Upgrading Stores

Outback Achieves 400 Billion KRW in Sales Last Year
Expanded Delivery Service Over 3 Years of COVID-19
Currently Operating 101 Delivery-Only Stores
VIPS Runs 23 Specialized Stores Out of 27 Total
RMR Sales in First Half Surge 2.7 Times Year-on-Year

Outback Steakhouse Yongsan I'Park Mall Branch

[Asia Economy Reporter Moon Hyewon] As family restaurants enter a declining industry and most have withdrawn, the reason why only Outback and Vips are thriving is interpreted as their ability to quickly read rapidly changing dining trends and respond diligently. During the three years of the COVID-19 period, they transformed mainly into delivery services to adapt to the contactless era, and anticipating the explosive increase in dining demand in the endemic era, they enhanced competitiveness by premiumizing their offline stores.

According to the industry on the 8th, Outback's sales last year reached 400 billion KRW, an increase of more than 30% compared to the previous year (297.9 billion KRW). As delivery demand increased due to COVID-19, Outback significantly expanded its delivery service starting in 2019. As a result, delivery business sales, which were only 370 million KRW in the third quarter of 2019, grew steadily to 1.1 billion KRW in the fourth quarter, 2.4 billion KRW in the first quarter of 2020, 8.3 billion KRW in the third quarter, and 12.5 billion KRW in the fourth quarter. This represents a 34-fold growth in just one year (four quarters). Last year, delivery orders for Toowoomba Pasta, Outback Garlic Steak, and Double Mushroom Steak grew by 170% compared to the previous year.

Delivery-only stores are also continuously opening. Currently, Outback operates 81 restaurants and 101 delivery-only stores.

As delivery demand is expected to decrease somewhat with the transition to the endemic phase, Outback is also expanding its To-Go stores that allow pickups in the second half of the year. Some stores are piloting a To-Go service where customers come directly to pick up their orders, and pickup-enabled stores account for about 10% of all Outback delivery stores.

Offline stores are mainly located not in traditional street locations but inside department stores or complex malls to increase accessibility and attract family customers. This reflects the shift in climate and consumption patterns, with demand concentrating in large shopping malls where dining and shopping can be done in one place. There is also the advantage of improved customer accessibility due to ample parking space and convenient public transportation. The store atmosphere is decorated with luxurious interiors, and product quality has been enhanced to implement a premium strategy.

VIPS Premier Seoul Banpo Station Branch. Photo by CJ Foodville

Vips, operated by CJ Foodville, is also transforming its store environment to focus on contactless and delivery services, aiming for a rebound opportunity. The existing stores follow a 'two-track' strategy of premiumization through specialized stores such as 'Premier' and 'Taste up+'. The number of Vips specialized stores is 23, accounting for 85% of the total 27 stores. Vips plans to renew 1 to 2 more stores within this year to increase the number of specialized stores. Among the specialized stores, the 'Charcuterie Zone,' introduced in line with the wine trend, is known to have significantly contributed to store sales growth. The Charcuterie Zone is an unlimited alcohol corner offering wine, beer, and other alcoholic beverages.

A CJ Foodville official hinted, "In specialized stores with the Charcuterie Zone, about 500 bottles of wine are consumed daily."

Sales of restaurant meal replacements (RMR), whose demand has increased mainly among single-person households, have also entered an upward trend. Vips' RMR sales in the first half of this year surged 2.7 times compared to the same period last year.

Professor Eunhee Lee of Inha University's Department of Consumer Studies said, "Even if the spread of COVID-19 slows down, delivery is unlikely to shrink significantly. The steadily increasing popularity of meal replacements is expected to continue, and the specialization and premiumization of offline stores will be a good strategy to satisfy consumers' long-suppressed dining consumption desires."

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