How Outback's success in Brazil is keeping the Australian-style barbecue chain alive

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In the first half of 2023, Brazilian sales grew by 61%, foot traffic increased by 42%, and the average check increased 19.2% compared to the same period in 2022.

These figures contrast sharply with Outback’s U.S. operations, where sales grew 3.9%, foot traffic decreased 5%, and there was an 8.9% increase in average check. In the first half of 2023, Brazilian sales surged by 61%, foot traffic rose by 42% and the average check increased by 19.2% compared with the same period in 2022.

These figures sharply contrast with Outback’s U.S. operations, in which sales grew 3.9%, foot traffic decreased 5%, and the average check increased 8.9%.Brazil’s burgeoning middle class is a crucial factor in this success.Outback’s journey began in Tampa, Florida, in 1988. In 1997, Outback opened its first Brazilian restaurant in Rio de Janeiro. By 2020, the Latin American market was a major factor in the company’s expansion. It had 109 stores in Brazil. Bloomin’ Brands was reported to be considering divesting its Brazil assets worth $472 million in 2020. This would streamline operations and boost margins. In 2021, sales in the Brazil segment grew by 26% over the previous year, reaching $259 million. The business commanded 42% of the company’s international footprint.

The blend of American and Australian-inspired barbecue resonated in a country steeped in traditional barbecue culture. As Brazilian consumers have returned to dining out, they’re looking for new experiences such as themed restaurants, which have a mass appeal nationwide, especially in the southern and southeastern regions.

Outback’s footprint in Brazil is strategically placed in highly populated areas such as Sao Paulo, Rio de Janeiro, and Brasilia. Those restaurants are also in areas where purchasing power and average earnings are increasing.

Nearly half, or 47%, of Brazil’s more than 213 million people are considered middle class, according to a study by the Harvard Review of Latin America. The Brazilians are known for eating out a lot. In the second quarter of 2010, the Brazil segment experienced a 4.1% increase in same-store sales, despite a slight drop in traffic from the year before. Restaurant sales surged by $119.3 million, up nearly 20%, in sharp contrast to its U.S. performance.

Bloomin’ Brands has seen a notable share price recovery, rising from pandemic lows to $28.18 a share as of Aug. 31. The activist investor Starboard Value’s purchase of 9.9% Bloomin’ shares early in August was the catalyst for this uptick. The firm is known for its success with companies such as Papa John’s and Darden Restaurants.

Watch the video above to learn how Outback Steakhouse won over Brazil.