Red Robin’s off-premises business, including catering, jumped 26.9 percent in Q4. It mixed 13.9 percent of the company’s total food and beverage sales—a pretty consistent theme over the past two years (the segment boosted 37.3 percent, year-over-year, in Q3).
For all of fiscal 2018, off-premises hiked 31.5 percent versus 2017 and stood at 9.9 percent of sales. This past year, it rose another 28 percent to 12.4 percent, or $163 million. In 2016, off-premises represented just 5.7 percent of Red Robin’s business.
Delivery, thanks to three major aggregators, currently accounts for more than 5 percent of sales.
Red Robin also plans to launch last-mile delivery in early 2020 where guests can order directly from the site, with delivery outsourced. The move promises favorable economics versus third-party, as well as retention of guest data and customers’ ability to use Red Robin’s loyalty program.
So, while some parts of the burger chain’s business have struggled recently—dine-in sales declined 2 percent in Q3—its away-from restaurant category has not.
Donatos instantly adds a highly incremental delivery channel to Red Robin. Jason Rusk, the chain’s VP of business transformation, previously told Columbus Business First Red Robin wanted to encourage additional occasions with the move. And it looked at concepts with delivery experience and a history rooted in quality. Donatos, which recently signed three franchise deals in Florida, was founded in 1963 when Ohio State sophomore Jim Grote bought a small pizza shop in Columbus, Ohio, from a young seminarian for $1,300.
Donatos has worked under a national umbrella as well. It was acquired by McDonald’s Corporation in 1999 before being sold back to Grote and his daughter, Jane Abell, in 2003.
So far, Donatos has kept its footprint tight to its Midwest base to alleviate supply chain concerns.
Red Robin said Donatos aligns with its customer base—another critical element in play. It fulfills a guest need and is brand appropriate, the company said. Red Robin’s tagline, “Gourmet Burgers and Brews,” isn’t a branding canyon away from pizza