Outback Steakhouse Case
1) What are the standout business and economic characteristics of the
restaurant industry?
* Restaurant-industry sales are forecast to advance 4.5% in 2003 and
equal 4% of the U.S. gross domestic product.
* The overall economic impact of the restaurant industry is expected
to exceed $1 trillion in 2003, including sales in related
industries such as agriculture, transportation and manufacturing.
* Food and Drink revenues were estimated at $426 billion.
* More than seven out of 10 eating-and-drinking places are
single-unit (independent) operations.
* The restaurant industry employs an estimated 11.7 million people,
making it the nation's largest employer outside of government.
* The restaurant industry provides work for more than 9 percent of
those employed in the United States.
* Restaurant industry employment was expected to reach 13.3 million
by 2012.
* Eating-and-drinking places employ more minority managers than any
other industry.
* Two-thirds of supervisors in 2000 were woman, 16% were
African-American, and 13% were Hispanics
* A typical household spent $2,116 on food away from home.
* The largest spenders in the industry had a household income of
over $70,000 ages between 45-54 and children over 18.
2) What are the key success factors in the casual dining portion of
the restaurant industry?
Casual dining has become the biggest trend in the restaurant industry.
Customers no longer visit restaurants just to eat. They want to invest
in time shares of virtual vacation; they long for a ...
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...would higher prices of meals two to three dollars per meal, but also
keep his niche which is a customer friendly, high quality meal, “no
rules” environment to dine in. This recommendation would not only
keep his customer cliental but also increase his customer base and
increase his profit margins and sales. Outback Steakhouse is unique
for its quality and taste of food, and its casual dining atmosphere.
That uniqueness will allow Outback to increase its price without
losing customers. Also according to the restaurant industry trends,
the majority of people that eat out have an annual income of $70,000
or more. Raising the price a couple of dollars will not hurt many of
Outback Steakhouse customers financially. Therefore, raising prices
would be very beneficial to Harry Gauntlett and the company’s
shareholders.