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The Australia-themed, American restaurant chain Outback Steakhouse announced it will close nearly half its branches in Hong Kong, blaming high rents and weak sales, as the city’s consumers troop to mainland cities like Shenzhen for shopping and entertainment amid easier cross-border travel.
Outback will shut nine of the 19 branches it operates in the city, affecting more than 300 of its staff, it said. The chain has outlets located across the city, from Hong Kong Island to New Territories, and opened its newest branch, spread over 3,800 sq ft in Central, in April.
The global restaurant chain, founded in 1988, is known for its signature steaks which are priced from HK$288 to HK$518, with the average dining cost ranging between HK$201 and HK$400, according to online food and restaurant guide OpenRice.
“We have made the difficult business decision to cease operations of nine Outback Steakhouse restaurants in Hong Kong,” the company said in a statement. “This decision is the culmination of a meticulous review process that considered current market conditions, our operational costs, and the strategic direction of our company.”
Majority-owned by Bloomin’ Brands, a Florida-based casual dining company, the chain operates more than 1,000 restaurants globally, with 694 in the US alone.
The Hong Kong outlets that will be closed are located in Discovery Park, Causeway Bay, Wan Chai, Tsim Sha Tsui East, Tuen Mun, Whampoa, Telford, Silvercord Tsim Sha Tsui and Lohas Park.
“We remain committed to the Hong Kong market with our 10 branches and will continue to serve customers with the same commitment to quality and excellence that they have come to expect from the Outback brand,” the company said.
Hong Kong’s retail sales fell 11.5 per cent to HK$30.5 billion (US$3.9 billion) in May from a year ago, the second consecutive month of double-digit decline, according to the government.
The downturn was largely attributed to the rising trend of cross-border spending, as more Hongkongers flock to the mainland to take advantage of lower prices for dining and shopping.
Diao Tong, 40, a worker in the finance industry who got his lunch at the Outback Causeway Bay branch once a month, said the closure of the branches could be purely because of economic factors.
“More people flocking to the north to spend definitely affect these restaurants’ businesses, but they should also reflect why such situations happen and how to attract customers,” said Diao.
Zhang Guangmin, 30, an IT expert who occasionally visited Outback for lunch, said he was bit saddened by the decision to close some of the branches.
“Hong Kong is famous for its diverse food, and as a person from the mainland, some Hong Kong local foods don’t appeal to me, so more choices are actually good,” said Zhang.
“I think the reason behind the shutdown could be that more foreigners have left Hong Kong in recent years,” said Zhang. “Many customers including me are accustomed to spending in Shenzhen now.”
The retail sector may continue to face challenges in the near term, said a spokesperson for the Census and Statistics Department earlier this month.
Outback Steakhouse is not the only retailer to have taken a hit. Grocery chain 759 Store last week said that it was freezing major investment plans and reviewing tenancy agreements for its 165 outlets. Japanese fashion retailer GU, a sister brand of Uniqlo, is shutting its 6,000 sq ft outlet at Hysan Place in Causeway Bay.
Lawmakers in the city have called on the government to lower commercial rents, after a survey conducted among 409 individual shop owners found that more than half the business owners saw increased rents despite lower footfall and sales numbers.


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The American restaurant will shut nine of the 19 stores it owns in the city, affecting more than 300 of its staff, Outback said in a statement


American restaurant Outback Steakhouse will close nearly half its branches in Hong Kong, as high rents and weak sales take their toll.


Outback shuts 9 Hong Kong steak houses, lays off 300 as diners head to mainland China

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;}The American restaurant will shut nine of the 19 stores it owns in the city, affecting more than 300 of its staff, Outback said in a statement

The American restaurant will shut nine of the 19 stores it owns in the city, affecting more than 300 of its staff, Outback said in a statement