Business Industry Forecasting

Business Industry Forecasting Introduction Outback Steakhouse is rightfully considered to be one of the fastest growing and most popular restaurants in America. There were 20021 official Outback Steakhouse restaurants in 23 countries of the world in the year of 2004. The original company turned into seven different departments or branches that function and exist under different names and deliver various types of foods to the clients. At the same time, all of these restaurants manage to keep the tradition of excellence and of Beliefs and Principles established by the company’s leaders initially (Outback Steakhouse Annual Report 2005). It’s difficult to verify the precise causes contributing to Outback’s huge success but many point such growth and development to the loyalty and courage put forth by the very people who formed the restaurant in 1987. For instance, Outback servers compose their own starting bank from the last night’s tips and settle cash and credit slips at the end of the evening making use of a printout of all the transactions they had at the terminal-register. Waiters are released from the floor in waves that commence before the restaurant really closes and a head wait or chosen supervisor checks the settlement forms, enters sales data into the managing partner’s data-machine and deposits the money. By structuring the operations this way the supervisor and managing partner are able to continue monitoring the guest experience, thus they can notice specific details in the restaurants work that have to be improved. It is an agreed upon condition that Outback’s managing partners and supervisors have a five days working week. Outback’s managing partners’ income is directly tied to the cash flow of their restaurants.

That’s why they operate more efficiently (e.g. cut costs) in areas where their rivals who have a determined salary might not. Industry Features (Long Range Forecast) The index, which traces the condition of the U.S. restaurant industry, is set on surveys of 500 restaurant operators, it measures tendencies in sales, labor, traffic, capital expenditures and businesses’ considerations about future prospects of growth and development. Twenty-five percent of the recent survey's respondents showed a year-to-year increase in client traffic in April. This figure increased from the 22 percent who showed such an growth in March. Nevertheless, client traffic in April 2005 was still well below the April 2004 level, with 56 percent of restaurant businesses reporting a drop in traffic, compared with the year-earlier month. Nineteen percent showed no change in April. Growth in same-store sales between April 2004 and April 2005 were named by 28 percent of restaurant businesses, downward 1 percent from the respondents showing such increases for March. Fifty-four percent of the restaurant operators participating in April-survey still reported decreases, while 18 percent reported no alterations. Forty-seven percent of restaurant businesses made a capital expenditure for equipment, development or remodeling during the past three months, which is the highest level since November 2004 (Outback Steakhouse Annual Report 2005). Forty-five percent of restaurant operators anticipate to have increased sales in six months than they had the year before, as compared with 41 percent who were likewise optimistic last month.

Fifty-five percent reported they plan to make capital expenditures for equipment, development or remodels in the next six months, while only 53 percent planned to do so last month. The strategic quickness and superior growth rates that have been the characteristics of many rising restaurant operators among the industry’s second-rank chains have been slowed down in part by recession and war in Iraq and earlier war in Afghanistan, the new Nation’s Restaurant News’ (NRN) Second 100 report says. If compared with the conventionally slower growth rates of more “massive Top 100 competitors, the smaller outfits’ rather broader growth opportunities were assets in times of a hotter economy” (Goldstein and Lorber 2002, p. 14). Yet, comparisons of Second 100 operators and Top 100 players continue to be somewhat theoretical. The second level of restaurants, while actually making up half of the NRN Top 200, produced just 13.43 percent of the $167.92 billion in aggregate sales generated by foodservice’s 200 largest brands in the 2005. That Second 100 input to the Top 200 was down from 13.50 percent in 2004, pausing the second tier's recent string of gains in Top 200 market share. At the same time the dynamics of the Second 100 are of undeniable interest to many in and out of foodservice, covering vendors, investors, career seekers and real-estate agents. The second tier of major chains usually is observed as the temporary home of the next Outback Steakhouse’s, McDonald’s or Starbucks restaurants. By using the system-wide sales measures, the tacos and burritos of Baja Fresh Mexican Grill and Chipotle along with the burgers and desserts of Culver’s Frozen Custard aided in putting these three brands among the grades of the five fastest-growing in year 2004 Second 100 study.

A greater part of the casual-dining chains in the Second 100’s dinner-house group were able to post sales growth during an economic recession, with two chains, Buca di Beppo and Outback Steakhouse Inc., being the leaders of the corresponding group in the U.S. system-wide sales. With 23 of the group’s 38 restaurant concepts showing increases in sales for 2005, Buca di Beppo and Outback Steakhouse Inc. again showed the most substantial sales growth. In the Second 100 restaurant group’s sales-growth competition, Carrabba’s Italian Grill and Buffalo Wild Wings Grill along with Bar also showed substantial growth, with each chain’s system-wide rates exceeding 27 percent. Outback Steakhouse Inc. is predicted to continue expanding in the range of 13 units to 15 units over the next several years in strict accordance with its domestic plan of roughly 140 to 165 units (Outback Steakhouse Annual Report 2005). Carrabba’s, which is a division of Outback Steakhouse Inc., is also expected to climb several steps in the Second 100 rankings, fueled by 22 new units that are to be opened over the next few year. Officials predict it is on track to produce approximately $1 billion in annual sales. Conclusions and Recommendations Outback, as a restaurant operator, is big on co-sponsoring sports events with charitable institutions and companies as a way of presenting itself in a community. Outback top supervisors mention that it is important to the future success of the chain that managing partners undergo at least six months of concentrated training at an established unit.

What is more, Outback’s managers see a lot of advantages to hourly checking method used in Chilli’s because the most important thing a manager does is check food quality, and it’s easier for the supervisor to conclude the readiness and quality of food. The long waits related to Outback are positive in a way because they show that diners think enough of the experience to put up with some bother. However, for Outback there would appear to be no easy solution to long lines because the chain deliberately limits seating to ensure that the kitchen can turn out the quality of food that has received high appraisals with consumers. So while Outback is looking for suitable solutions to a problem many of its rivals wish they had- long lines- its managing partners and front-of-the-house groups attempt to distract guests with service that truly impresses. It’s as the slogan that proclaims: “No rules- just right!”