Red Robin is rolling out three new virtual brands nationally, joining a trend that’s only increasing in popularity.
The delivery-only brands are called Chicken Sammy’s, The Wing Dept., and Fresh Set.
Chicken Sammy’s offers a variety of chicken sandwiches, chicken tenders, salads, and wings. Fresh Set includes wraps, sandwiches, chicken tenders, salads, and wings. The Wing Dept. also serves wings, except its menu includes Cauliflower Wings. Several items overlap across the three concepts.
Red Robin said the creation of the three virtual concepts came as a result of its partnership with Donatos Pizza in 2018. As part of the union, the chain has featured Donatos as a delivery-only brand across third-party delivery providers.
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Based on that Donatos experience, the chain decided to develop three new virtual brands, which include “a mix of items from Red Robin as well as offerings not featured on the Red Robin menu.”
“We are pleased that these new concepts were well-received by our guests in our recent test. As a result, we have recently started a national rollout,” CEO Paul Murphy said in a statement emailed to FSR. “We plan to continue to invest in these new virtual brands and will be introducing new craveable menu items for each brand soon.”
Donatos pizza is now served in roughly 120 restaurants—a number that’s expected to increase to about 200 by the end of 2021.
The brand expects to generate more than $60 million in pizza sales and more than $25 million in profitability by 2023, when the rollout to 400 stores will be complete. Restaurants that offered Donatos in Q4 outperformed other stores with similar indoor restrictions by more than 500 basis points.
Red Robin’s off-premises sales grew 131.8 percent in Q4, and mixed 43.9 percent. Roughly 80 percent of those orders came through digital channels. At restaurants with less than 50 percent capacity, off-premises accounted for about 55 percent of sales. At stores with 50 to 74 percent capacity, the mix is 38 percent. For those operating 75 percent or greater, it’s roughly 31 percent—which is still more than double the pre-pandemic mix of 14 percent.
In the final week of February, company-run stores with open dining rooms saw same-store sales decline just 9.1 percent, with an average capacity of 45 percent.
A number of casual-dining chains have created virtual brands amid the pandemic to take advantage of the accelerating delivery market. That list includes: It’s Just Wings, Chili’s; Cosmic Wings, Applebee’s; the Melt Down and the Burger Den, Denny’s; Slo Roast, BJ’s Restaurants; Tender Shack, Outback; and a lot more.