Metro Diner platter of food for Easter.
Metro Diner

Bundles have played a big role in Metro Diner's off-premises strategy.

Metro Diner Morphs into the Restaurant Brand of the Future

The emerging chain is constructing a prototype that caters to carryout and delivery.

Metro Diner knew off-premises was paramount before March—the COVID pandemic only confirmed its beliefs.

Before the outbreak, the chain completed a systemwide rollout of DoorDash and Uber Eats. And in December, it started an initiative to increase the number of loyal customers.

So when sales sank more than 80 percent after the state-mandated closure of dining rooms, Metro Diner was prepared. Before COVID, off-premises represented about 12 to 13 percent of revenue, and third-party delivery was about one-third of that channel. In the weeks following their pivot to off-premises only, delivery and to-go business tripled, and the company reached 45 percent of previous sales even before dining rooms reopened. In December, the brand had around 35,000 customer email addresses in its database, but by March, that grew to 180,000.

Hugh Connerty, co-chairman of Metro Diner, says the restaurant won’t revert back to the days when off-premises represented 12 to 13 percent of sales. He believes it will remain closer to 30 percent in the post-pandemic future.

“We think that this entire experience that our country is going through—and what the consumer is going through—is a different paradigm and people are going to be forever changed,” Connerty says. “I don’t think it ever goes back to the way it was before. I think companies have gotten much better at how they package product, and a lot better at how they present it and get it to their guests. The software systems that have been developed to help do those kinds of things to make it seamless and really easy to order and pay and pickup—there’s been some innovation that’s occurred because of this crisis. Consumers like it. They really do. And they let us know that.”

Connerty has seen his share of disruption over the decades. He was the first franchise partner in Outback Steakhouse and started Hooters of America in 1984. Connerty was also on the frontlines helping Darden develop LongHorn Steakhouse.

But these past months have moved at different pace.

For Metro Diner, a brand he bought into with Outback founder Chris Sullivan and Carl Sahlsten, the former president of Carrabba’s Italian Grill, in 2015 as part of ConSul Hospitality Partners, sales have increased weekly, but growth hasn’t been without its challenges. At the beginning of the pandemic, Metro Diner was forced to temporarily shut down 18 of its 58 units. Close to 4,000 employees were furloughed. Diners were staffed with management and a few key employees to execute to-go business.

Now that dining rooms have reopened, about half of those closed stores have come back online. Metro Diner increased revenue for eight straight weeks and recovered about 80 percent of sales. Breaking it out by daypart, Connerty says, the company is seeing heavier usage at dinner. Lunch remains solid, but there has been a notable decline at breakfast during the week—a trend seen across the industry as workers go without their morning commute.

However, the rising number of COVID cases nationwide put a halt to that momentum. The brand recently saw a retraction in sales week-over-week, although they’re still around 70 percent recovery.

Metro Diner’s home state of Florida reported a record 10,109 new cases on Thursday. On June 1, the state reported 667 new cases. California, Texas, and several other states are experiencing the similar issues.

Metro Diner was founded by Mark Davoli and his father, John Sr., and brother, John, Jr., in 1992. Davoli was a former grill cook at an Orange Park, Florida, Outback owned by Connerty.

“We are being inundated on every form of media whether it’s television, cable. I get most of mine through a number of sources on my iPad,” Connerty says. “It’s nothing but stories about [COVID cases].”

While the rising number of cases is out of Metro Diner’s control, enhanced sanitation efforts are well within their purview.

The brand fully sanitizes its dining rooms before opening, with continued disinfection throughout the day, especially high-touch surfaces. Tables, seats, condiments, and payment devices are cleaned after every use. Hand sanitizer is available for every customer, and all menus are disposable.

Tables are spaced 6 feet apart, and no more than six customers are allowed at one table. Waiters also maintain a 6-foot distance whenever possible. If there’s a wait, the restaurant texts customers when a table is available, so guests can stay in their cars. In addition, employees’ temperatures are checked before each shift, and each worker is required to wear a mask and gloves.

Connerty says he’s seen a growing number of customers play their role in maintaining safety. He estimates that early on, fewer than 20 percent of customers wore masks. Now, he’d say it’s closer to 85 percent.

“There’s been an absolute level of acceptability for people to actually do this, and it’s almost become rude of you to not have a face mask on,” Connerty says. “I think that’s the feeling people have, and they’re doing their part.”

As a result of the COVID spike, Texas moved its capacity limits from 75 percent back to 50 percent. California is closing dining rooms again in more than a dozen counties. It’s well within the realm of possibilities that more states will follow suit.

If that does happen in Metro Diner’s markets, the brand won’t be caught off-guard.

A prototype in Orlando is currently being constructed to address throughput for to-go and third-party delivery business. This includes changes to the equipment, structure of the building, and make line. The store will be staged in a manner that’s convenient for customers grabbing takeout and delivery drivers picking up orders.

The new store is scheduled to open in the third week of July. If the prototype works, Connerty says Metro Diner may convert all of its stores.

The chain is fully committed to the restaurant of the future, the co-chairman notes.

“Any restaurant you operate, if you have seating capacity pre-COVID like we did of 125—and we are absolutely packed a lot, on weekends there’s always a wait—and you open up the ability for third-party delivery, all of a sudden, it’s like adding twice as many tables and the kitchen can collapse because you can’t get the orders out,” Connerty says. “So we’ve taken all that into consideration and we’ve tried to come up with what we think is the right combination and formula.”

“… We’re excited about it,” he continues. “We’re taking our best knowledge of how to position our facilities so they’re more adaptable to what we see is the future business model, which absolutely will include a much greater number of parties that order to-go and through third-party delivery.”