Across the US, food places are doing whatever they can to avoid bankruptcy. To keep revenue high, and the wolves from the door, Outback Steakhouse is jacking up prices, and they're losing customers because of it.
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Footfall is declining across the restaurant industry, and Outback Steakhouse is scrabbling for ways to stay afloat. The previously loved Australian eatery has decided that rather than keeping prices stable and closing stores, it would increase its menu cost.
But, this has driven their customers to leave in their droves. Rather than stick to what they love and pay a little more, it appears they're headed to other similar restaurants. Outback Steakhouse has seen a massive 70% drop in stock price.
While they watch their stock plummet, competitors have seen an increase. Rather than go to Outback Steakhouse for their carnivore fix, customers have been going to Texas Roadhouse and LongHorn. Both of these steakhouse alternatives outsold their competitor last year.
Outback Steakhouse Can't Keep Customers
The Australian steakhouse has been the market leader for a considerable number of years. However, with their jacked prices, they're falling from grace. Texas Roadhouse has seen an increase of 15% in their stock, while Longhorn has seen an impressive 25%. There is no doubt that these numbers have been pulled from the doors of Outback.
With the tight squeeze on the everyman's wallet in the US, people are picking their meals much more frugally. Outback Steakhouse, in recent years, has hiked its prices while cutting its own costs. People notice quality decreases like this.
For comparison, the average bill was around $29 in Outback Steakhouse last year. Texas Roadhouse was a full $6 cheaper, with Lonhorn also sitting $2.50 less. The numbers may not seem like much, but they make a difference to the consumer.
Putting Outback and Roadhouse side by side, the menu differences point to why people have started to leave Outback. Overall, the Outback menu is more expensive, with the occasional promotion. However, rather than have one-off promos, Roadhouse keeps its whole menu lower.
This gives more options to the budget-conscious diner. If Outback Steakhouse doesn't switch its model up soon, it may be the end for them.
