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Outback Steakhouse Economy

504 Words3 Pages

“How’s an area’s economy doing? Just check the traffic at casual dining restaurants such

as Outback, Longhorn, Logan’s and Olive Garden,” writes Ted Carter in a Business Journal

article. Carter explicates that sales at several Outback Steakhouse locations dipped during the

recession and picked up during better times. The economy has several implications on the casual

dining industry and a few explorative studies are able to show these relationships. Food is a basic

amenity that people must spend money on regardless of economic times. Casual dining is a fast- growing segment of the restaurant industry that appeals to families in an array of income ranges.

Therefore, the economic implications are not as simple as they first seem.

David Herbert, a …show more content…

(Jones, Herbert, Hudspeth, Soni, Tarry and Walton 364). This anomaly can perhaps be

explained by the practices that restaurants such as Ruby Tuesdays and Cheesecake Factory had

began implementing before and during the recession. At the time, escalating gas prices and

higher interest rates inhibited spending by middle-income families. Restaurants started

improving their menus and decor, in order to appeal to a more higher-income demographic, who

were more immune to rising prices and a slump in the economy (Cobb). These restaurants had

experienced growth even during the worst years of economic slump viz. 2007 to 2009. Ted

Carter reiterated the point, “Food quality and price can offer some offset to negative economic

factors,” referring to the additions of pricier foods like sirloin and seafood to the menu.

There is empirical evidence to show that different income groups are affected differently

by an economic recession. In addition to this, restaurant sales vary according to the amounts and

types of wealth that customers have at their disposal. A household’s wealth are of three types

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