As TGI Fridays (TGIF) decided to cease operations in the country, only Vips and Outback Steakhouse, which thrived during the 1990s, remain. Vips and Outback are said to be leading the revival of family restaurants with their distinct survival strategies.
◇ Vips focuses on 'premium specialized stores,' while Outback aims for 'broader age groups'
According to related industries on the 5th, Vips, operated by CJ Foodville, has positioned its business direction as 'premium' and is bold in closing stores with low revenue instead of pursuing aggressive expansion. After increasing the number of stores to 112 in 2015, Vips reduced its locations to 41 in 2019, 34 in 2020, and 28 in 2023. However, focusing on store renovations, it opened seven new locations last year.
CJ Foodville noted that the performance of the newly opened stores last year was remarkable. The relocated store, Magok One Grove, which moved from its original location in Seoul's Deungchon, surpassed 20,000 cumulative visitors within a month of opening in December last year.
A CJ Foodville official said, "Average sales per store of new locations in 2024 are about 35% higher compared to the average sales per store in 2023." They are thoroughly analyzing market dynamics and strengthening the launch of specialized stores, such as 'kid-friendly' locations, tailored to regional customer characteristics, and this strategy has reportedly been effective.
For instance, the Lotte store in Eunpyeong, Seoul, targets child customers. It features a 'Carnival Kids Room' that simulates an amusement park atmosphere and photo walls. Additionally, the kid's menu includes mini churros, popcorn, and marble ice cream desserts, as well as mini sausage skewers and spicy rosé tteokbokki, aimed at family customers. According to CJ Foodville, the number of children utilizing the salad bar at the Lotte Eunpyeong store is over 46% higher than the average of other stores.
CJ Foodville noted, "Due to rising prices, customers who want to experience a luxurious dining culture at reasonable prices are increasingly visiting Vips."
Outback, operated by Dining Brands Group (formerly bhc Group), is trying to transform its brand image by redefining its target demographic from families to younger customers. In April last year, Outback announced it would change its brand concept from 'family restaurant' to 'casual restaurant' and introduced four new menu items.
At the time, Outback stated, "We will take a step beyond being a dining space for families to become a dining venue for friends, lovers, and various gatherings," and added, "Starting with the introduction of new menu items, we will gradually elevate the overall framework of operations, including location, design, and service."
Outback representatives noted, "The average number of monthly visiting customers increased by over 10% compared to last year, and the proportion of dining for families, as well as date nights, gatherings with friends, and workplace colleagues, mainly among the 35 to 49 age group, has significantly increased."
They are aggressively increasing the number of stores. After being acquired by bhc Group in November 2021, the number of stores grew from 76 in 2020 to 96 last year. Sales also surged from 297.8 billion won in 2020 to 411 billion won in 2022, and 457.6 billion won in 2023. Operating profit reached 79 billion won in 2023, a 34.1% increase compared to the previous year. The industry estimates that Outback's revenue last year approached 500 billion won.
◇ Constantly seeking change… New menu launches and delivery services
Vips and Outback are considered 'first-generation family restaurants' that thrived during the late 1990s to early 2000s, alongside establishments like TGIF and Bennigan's. Bennigan's withdrew from the domestic market in 2016, and TGIF will cease operations by next month. Others like Marche and Sizzler left in 2013, while Tony Roma's withdrew in 2014. With the increase of single-person households and the trend towards 'well-being,' consumers have become more quality-conscious rather than quantity-focused. The dining culture and customer preferences are changing, but most family restaurants have failed to keep pace with this trend.
The industry suggests that Vips and Outback have been able to survive because they have continuously attempted change. For example, Vips introduced a new menu inspired by the popular drama 'Reply 1994,' which is set during the dawn of family restaurants in the 1990s. This was around 2014 when first-generation family restaurants were struggling in the domestic market.
A CJ Foodville official stated, "We are launching diverse salad bar menu items every season and also operate a 'Wine & Pairing Zone,' where wine, beer, and finger foods are available for unlimited enjoyment."
Outback focused on delivery menus in response to the challenges of the COVID-19 pandemic. After opening its first 'delivery-only store' in September 2019, it added 'delivery order capabilities' to the Outback Steak mobile app starting in early 2022, continuously introducing delivery-exclusive menu items.