Steakhouse Chains: Steak and Ale and Outback: New Formats for Success

In 1966Norman Brinker sold Brinker’s Coffee Shop and opened his first Steak and Ale in Dallas, Texas. Unlike Western Sizzlin’, Ponderosa, and Bonanza, which the geographers John Jackle and Keith Sculle have called “budget steakhouses,” Steak and Ale aimed for a middle class clientele one step above those restaurants. Unlike the big three, Steak and Ale featured table service in an English setting modeled on an eating scene in the 1964 film Tom Jones. Brinker, who would later oversee chains like Bennigan’s and Chili’s, strictly limited the menu to a handful of steak entrées in order to purchase higher quality meat and still keep prices affordable. While the budget steakhouse continued to thrive, Brinker sought to establish some cultural and socioeconomic distance from these budget competitors by featuring so-called better cuts like sirloins and filet mignon. At the same time, Steak and Ale pioneered both the self-service salad bar and the college-age wait staff, both of which helped control food and labor costs that might have driven consumers away from his establishment. In 1970, with only twenty stores, Steak and Ale went public; in 1975 it merged with Pillsbury. Both these moves reflected broader trends in the chain restaurant industry during the 1970s. To protect their supply of beef, Steak and Ale even got into cattle futures in 1973, right before a spike in beef prices that rippled through domestic and institutional markets.