|Outback Steakhouse corporate logo / Korea Times file|
By Kim Jae-heun
U.S. Australian-themed casual dining restaurant chain Outback Steakhouse has raised its prices again, in an attempt to maximize its profitability and put the company up for sale. This is drawing criticism from the public as the restaurant chain failed to notify customers in advance.
"It looks like Outback is trying to increase its company value by raising prices before selling off the brand. Its successful strategy to focus on deliveries of steak and pasta dishes has raised its value in the market," an industry source said, Sunday.
Outback Steakhouse changed its menu last October and increased the prices for 22 items by 6.3 percent on average. The price hike came two years after the last one, but the company did not disclose the updates on its official website.
Most popular dishes, such as T-bone steak, L-bone steak and Toowoomba steak pasta became pricier as a result. Outback also increased the price for its lunch set menu and its delivery fee.
"Many people are placing lunch orders at home or work because of the spread of COVID-19. But raising the price for two particular categories can only be seen as Outback trying to take advantage of the pandemic to maximize its profit," an office worker surnamed Park said.
The restaurant chain said the prices were raised along with changes that were made to menu items.
"We fixed the price when we changed the menu so we didn't make a special announcement. However, we are giving an explanation to customers who make inquiries," an Outback Steakhouse official said.
Outback has been raising prices every two years since December 2016. This time, it was due to the restaurant chain's plan to sell off the business.
As the restaurant franchise business here has been on the downturn, many local brands have either closed down or put themselves up for sale.
Outback was able to keep operating by developing new steak dishes and offering premium dishes, while implementing a new refrigerated distribution system to keep ingredients fresh.
This was all possible due to its new owner SkyLake Investment that acquired 100 percent of Outback Steakhouse Korea's share from the U.S. headquarters in 2016. SkyLake Investment is a private equity firm led by former Samsung Electronics CEO Chin Dae-je.
Since 2016, Outback Steakhouse's revenue and profit have been growing and peaked last year.
Taking advantage of COVID-19 as an opportunity, the restaurant chain targeted customers staying at home and ordering steak and beefed up its delivery service. Its annual sales soared from 254.3 billion won in 2019 to 300 billion won in 2020 and its operating profit also increased from 16.7 billion won to 240 billion won at the same time.
SkyLake Investment tried to sell Outback last May, but delayed the plan since it was taking over Solus Advanced Materials from Doosan at the same time.