Firstly, you need to export the Outlook contacts using the .csv file format. To do this, click the Options button from the File menu and then press Advanced. Open the Export menu, select the Export to a file option and press Next:
Select Comma Separated Values (Windows) and press again Next. Click the Contacts item from the list and then press Next:
After that, select a destination directory, type a name for the file and press Finish. Once the process is complete, launch the Address Book application, and from the File menu select New Group. Enter a name from the group, open again the File menu and press Import. Locate the .csv file that contains the contacts you wish to import, select it, press Open and follow the on-screen instructions.