How Outback success in Brazil keeps Australian-style BBQ chain alive

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Outback Steakhouse, renowned for its American twist on Australian-style barbecue, has found unexpected success in Brazil as its U.S. business stalls.

The South American segment is responsible for an astonishing 83% of Bloomin’ Brands’ total international sales. 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. It established its first Brazilian franchise in Rio de Janeiro in 1997. The Latin American market quickly became pivotal to the company’s growth, and by 2020 it had 109 locations in Brazil.

But Bloomin’ Brands’ revenue stagnated in the years before the pandemic. In 2020, reports circulated that Bloomin’ Brands might divest its Brazil assets, valued at $472 million, to streamline operations and bolster margins. Those plans to divest fell through when the pandemic hit.

In 2021, the Brazil segment rebounded, as sales jumped 26% year over year to $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 São 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. They’re known for their propensity to dine out. 

In the second quarter, the Brazil segment saw same-store sales grow by 4.1%, with a slight dip in traffic compared with the previous year. 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. This uptick was catalyzed by activist investor Starboard Value’s acquisition of 9.9% of Bloomin’ shares in early August. 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. 

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