Bloomin’ Brands CEO Elizabeth Smith views the “rapidly emerging” off-premise sector as a slam-dunk for large chains, which already have the built-in infrastructure to push off-premise programs.
“I think it's going to be something that we can deliver at scale,” she told investors during the company’s April 26 earnings call, “and that’s going to swing towards the large chains’ advantage as it grows out.”
Bloomin’ continues testing the use of third-party delivery services, while also building out its own in-house delivery network. By the end of the fiscal year’s first quarter, 116 Outback Steakhouse and Carrabba’s Italian Grill locations offered some form of delivery. Executives reported encouraging early results, validating beliefs that demand is strong for consuming restaurant food at home.
While the company likes the control it retains with its own delivery program, it’s not ready to cut off third-party providers.
“We’re going to let the customer decide, right? That’s why we’re testing both,” Smith says. “If the customer decides they want to do third-party, just because it makes more economic sense to you personally, you got to know what the customer wants.”
Smith says average delivery tickets are higher than those for dine-in customers. And the economics of running an in-house delivery service are attractive.
“That’s your customer, you get that database, you have the ability to communicate with them, you have the ability to give them Dine Rewards credit, you have the ability to give them a cheaper service because you’re not adding on that third’ party intermediary,” she says. “So, we’ll let the customer decide, but they’re pleased and we’re pleased with what we’re seeing by going direct.”
At Red Robin, executives have increasingly targeted off-premise dining, by pushing to-go ordering on television and digital ads and expanding online ordering capabilities through the online ordering platform Olo. In 98 locations, call-in orders are serviced by a centralized call center.
“Given our level of customization on gourmet burgers, we find that most guests still prefer to speak to a human to ensure their unique instructions are captured accurately,” Red Robin CEO Denny Marie Post told investors May 16. “The call center improves answer time—usually by the third ring—and accuracy by sending orders directly into the integrated KDS system via Olo.”
Post says Red Robin continues to slowly expand the reach of the centralized call center approach, adding about 50 restaurants at a time. Now, about 10 percent of all restaurants and a quarter of corporate units offer a curbside pickup option.
Plus, more than 130 stores have incorporated delivery through third-party services, but Post says that has not been a seamless transition: Those delivery orders must be hand transcribed because the technology of the delivery services doesn’t communicate with Red Robin’s POS system. And restaurants have heard of “too many cases” of promised delivery times not being honored by providers. For now, the company is evaluating providers before expanding delivery options.
“So what's the bottom line on the very hot topic of off-premise?” she says. “Well, we are moving smartly on new revenue streams, but it will be the second half of the year, as we've said, before we see a material lift in topline as we begin to actively promote the new offerings, reach new guests, and drive incremental occasions.”