Monday, November 16, 2009

Outback's designs on another traffic builder

Studding the menu with lower-priced options hasn’t reversed a traffic fall-off at Outback Steakhouse, but another potential remedy is definitely putting more butts in seats, according to an executive of the chain’s parent company, OSI Restaurant Partners.

CFO Dirk Montgomery told financial analysts today that design tweaks at 50 test outlets are bringing “traffic lifts ranging from the low single digits to the mid single digits, say five, 6%.”

Those increases coincided with a 10.7% drop in Outback’s comps for the third quarter.

Montgomery explained that a variety of alterations to the outside and interior of the steakhouses is being tried. The packages range in cost from $100,000 to $400,000 per store, he added.

He stressed that the various features are still being tested, and that more elements will be tried in the field through 2009 and into next year.

Among the variables yet to be pinned down, he said, is the right level of spending, the correct balance of investment and payback.

The chain also isn’t certain about what features to combine into a renovation package.

“It’s still too early for us to form conclusions about what the ongoing renovations strategy will be in terms of what elements we pick,” he explained.

Montgomery did not cite any specific design features but commented, “consumer perceptions of overall atmosphere have improved significantly.”

Published reports indicate that at least some of the interior designs play down the concept’s Australian theme.

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