Outback Steakhouse dream realized in Flowood

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Published: September 4,2014

Tags: australia, Business, Dining, Flowood, Mississippi, outback

Outback with a “Modern Australian” design opens Monday at 586 Park Way in Flowood.

Outback with a “Modern Australian” design opens Monday at 586 Park Way in Flowood.

A victory at the polls in 2006 after a pair of defeats in Flowood liquor-by-the-drink referendums positioned Steven Grantham Jr. to carry out his late father’s plans for a second Outback Steakhouse in Metro Jackson.

Flowood finally would get an Outback restaurant where diners could enjoy their favorite spirits along with thick cut grilled steaks and the acclaimed bloomin’ onion.

Then came the worst economic slump in 70 years, a recession so deep that parking lots of casual dining restaurants around the country went from overflowing to nearly empty. Grantham waited out the lean times, seeing sales drop at his Outbacks in Jackson, Meridian, Tupelo, Hattiesburg, D’Iberville, Southaven and Cordova, Tenn., and Jackson, Tenn.

» READ MORE: Casual dining is an economic indicator

By 2010, sales rebounded to pre-2007 levels, leading Grantham and his restaurant development and management company, J&R Restaurant Group, to return a Flowood Outback to their strategic planning.

The result: A 10:45 a.m. ribbon-cutting Monday for the $3 million, “Modern Australian” designed Flowood Outback, at 586 Park Way.

“The numbers had to work before anything,” Grantham said last week.

The first step came with Flowood’s allowing of liquor by the drink, a move Grantham said made it viable for the J&R Group to look for a location in the fast-growing Rankin County city. “Once the numbers worked to cover the fixed costs and long-term debt … we could see the light at the end of the tunnel,” said Grantham, president of the restaurant group founded by his father, Steve W. Grantham Sr.

A couple of years of flat sales followed the 2010 rebound but 5 percent revenue growth last year convinced Grantham it was go-time on the Flowood store.

Grantham could make the decision on his own because J&R is one of only three Outbreak franchisees in the country. The franchisees own a handful of stores while parent Bloomin’ Brands of Tampa, Fla., a publicly held company, owns more than 800 stores worldwide.

In fact, as Grantham broke ground in Flowood earlier this year, Bloomin’ Brands announced plans to close 22 under-performing Outbacks across the United states. As recently as the second quarter, the Outback Steakhouse parent reported higher expenses and lower traffic at its restaurants.

Bloomin’ Brands, nonetheless, has reported revenue gains since it went public in 2012, helped by new restaurant openings, The Wall Street Journal reported.

Bloomin’ Brands also operates Carrabba’s Italian Grill, Bonefish Grill, Fleming’s Prime Steakhouse & Wine Bar and Roy’s.

Same store sales rose 0.6 percent in the second quarter at domestic restaurants while traffic was flat for the company’s four core brands, the WSJ reported.

The Outbacks J&R Restaurant Group operates have rung up a 2 percent increase in sales in 2014, according to Grantham.

J&R’s Outback on Interstate-55 North in Jackson had fiscal 2011 sales of $3 million. That won it a ranking of 81st in sales among the 800-plus Outbacks.

On a “pound-for-pound” basis, the Jackson Outback performs at a level comparable to Outbacks in very high density metro markets, Grantham said.

“You can make money at $3 million a year,” he said.

He projects first-year sales at the Flowood Outback to be $3.8-$4 million. After the first year, he expects it to exceed $4 million in annual sales. The demographics and growth patterns, both commercial and residential, are the envy of cities across Mississippi and the rest of the South, Grantham noted.

“Once you go down Lakeland to Flowood you are not coming back,” said the 54-year-old Grantham, who has spent most of his life in the Jackson area.

“They have the schools, the churches…,” he said.

And City Hall “wants your business,” he added.

The late Steve W. Grantham Sr. opened the Jackson Outback in December 1993, drawn by strong demographics reflected in the 75,000 to 100,000 households within the Northeast Jackson corridor. “Now that demographic has moved again,” Grantham said. “Our next logical step was to go to Flowood.”

He said he will “watch what happens” in the next five to seven years before deciding whether to relocate the I-55 Outback a few miles to the north to Madison. “As long as it is making money I’m going to keep it open,” Grantham said. “When we have to start subsidizing it, we will re-evaluate.”

Grantham Sr. became one of the earliest Outback proprietors after making the acquaintance of Outback founders Tim Gannon, Bob Basham, and Chris Sullivan on a Dallas golf course.  He opened nine Outback franchise restaurants in the Dallas Metroplex over the next few years before selling out to the founders and returning to Jackson in 1992 to lay plans for opening an Outback in the Capital City.

Basham, a former Bennigan’s executive, had watched customer excitement over the Irish-themed restaurant grow stale over time, according to Grantham. “He wanted a place where people could eat, drink and have a good time,” he said.

The challenge in opening the first Outback in Tampa in 1986 and following-up with more stores involved positioning Outback as a frequent dining destination instead of one visited only on special occasions, Grantham noted.

“I think they hit that spot,” he said of the founders. “It is not a special-occasion place and it far surpasses our competition, bar none.”

Competition in the mid-range casual-dining category includes Longhorn Steakhouse, Logan’s Steakhouse and for price some of the Darden restaurants such as Seasons 52.

Bloomin’ Brands noted the intensity of the competition in its 2013 10-K filing with the Securities and Exchange Commission: “The restaurant industry is highly competitive with a substantial number of restaurant operators that compete directly and indirectly with us in respect to price, service, location and food quality, and there are other well-established competitors with significant financial and other resources. There is also active competition for management personnel, attractive suitable real estate sites, supplies and restaurant employees…. At an aggregate level, all major casual dining restaurants would be considered competitors of our concepts.”

But Bloomin’ Brands still holds an overall edge, the company said in the filing.

“We believe our principal strategies, which include but are not limited to, the use of high quality ingredients that are in line with our target pricing, the variety of our menu and concepts, the quality and consistency of our food and service, the use of various promotions and the selection of appropriate locations for our restaurants, allow us to effectively and efficiently compete in the restaurant industry.”

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  1. Casual dining is an economic indicator - Mississippi Business JournalMississippi Business Journal Says:

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