American restaurant chain Outback Steakhouse will close nearly half of its outlets in Hong Kong, citing operational costs and “current market conditions.”
The chain announced on Monday that it would shut nine of its 19 branches, with some 300 staff set to lose their jobs. Affected restaurants include outlets in Causeway Bay, Wan Chai, Tsim Sha Tsui, Tsuen Wan and Tuen Mun.
“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.”
Their last day of operation will be this Sunday, Outback Steakhouse said.
The American chain, which describes itself as “Australian-inspired,” first expanded to Hong Kong in 1999. According to its Florida-based owner Bloomin’ Brands, Outback Steakhouse has over 250 restaurants in 19 countries, including in Asia, the Middle East and Latin America.
Declining retail sales
The announcement of Outback Steakhouse’s closures came as consumption in Hong Kong remained weak after pandemic restrictions were lifted last year.
The city recorded an 11.5 per cent drop in retail sales in May – the latest month that statistics are available for – compared to the same period last year. The decrease marked the second consecutive two-digit slump.
A government spokesperson cited “changes in the consumption patterns of visitors and residents, as well as the strength of the Hong Kong dollar.”
Spending in the restaurant sector in the first quarter of the year was HK$28.2 billion. While this was an increase of 2.3 per cent compared to in 2023, it was below the HK$31.5 billion in the same period in 2019, before the protests that year and the subsequent Covid-19 pandemic.
The fall in consumption has been attributed to the rising trend of Hongkongers crossing the border to Shenzhen, where shopping and dining is more affordable.
In an interview with RTHK last month, Chief Executive John Lee was asked about the high number of shop vacancies. Lee said “objective figures” showed that the opening of stores outpaced closures, adding that “when 10 shops close, 16 open.”
According to the Chief Executive’s Office, Lee was referring to company registration figures in April showing the ratio of shop openings and closures.
