Is off-premises dining—particularly delivery—a blessing or a curse?
The answer is both, and it can be a “Catch-22.”
Research has shown the take-out and delivery trend is popular in all dining sectors. Consumers aged 18–34 tend to be the biggest users of these services with half saying they order food to-go more often now than in previous years. Key factors driving this increase: among all age groups, the availability of nearby take-out and delivery options and consumers getting into the habit of ordering in or picking up their food.
Off-premises dining is one of the hottest industry topics. It is one trend that is here to stay. As traditional consumer on-site dining continues to decline, operators in all restaurant sectors have to find new ways to drive sales. Customers are more likely to order take-out from a restaurant app or website than a third-party source. With the development of technology, online ordering is an area we’ve seen grow at fast-casual Little Greek Fresh Grill.
Off-premises dining is an add-on for incremental sales. For Little Greek, it is approximately 3 percent. From third-party delivery, our average store sales range from $1,500–$3,000 weekly.
Food delivery companies are partnering with restaurants that want to reach additional customers. The delivery services charge a commission on orders as well as a delivery fee.
In the case of Little Greek, we currently do about 55 percent sales in on-premises dining, 40 percent take-out, and 5 percent delivery. We tend to use the delivery services of companies such as Uber Eats, Grubhub, and DoorDash. To give an example of a commission fee, Uber Eats charges us a 32 percent commission on each order—and they want to charge more.
At what point does it become not worth using a delivery service? But on the other hand, can we afford not to offer it? Customer delivery peak hours are generally the same as that of on-premises customer rush. Will the customer suffer?
The investment of time to educate your staff is critical. What if the driver is late and the hot food has gotten cold?
Believe it or not, some delivery service drivers show up wearing pajamas. Drivers are seen eating food. Many restaurants have to find additional in-store space for as many as eight order tablets from all the different delivery services.
Some other observations about off-premises:
- Some food simply does not travel well. Cold fries anyone?
- Is safety with delivery drivers an issue? Restaurants bear the legal consequences of delivery driver actions.
- Pizza companies say staffing drivers has become a major challenge.
- Should we build smaller dining rooms as off-premises dining continues to grow?
Third-party delivery best practices:
- Meet the representative of the third-party service and establish the delivery expectations, i.e., where to pick up the food so not to wait in line.
- Have the drivers confirm each order.
- Only send out sealed beverages.
- Tie a knot in the bag once the delivery person signs the receipt confirming all ordered items are there.
Popeye’s Louisiana Kitchen announced it will soon be testing delivery in major markets including New York City, Chicago, and Miami. It will be in partnership with Uber Eats.
In the casual dining sector, some of the major national chains are perfecting off-premises systems to better successfully compete. The list includes brands such as Brinker (Chili’s Grill & Bar, Maggiano’s Little Italy), Darden (Olive Garden), and Bloomin’ Brands (Outback Steakhouse and Carrabba’s Italian Grill).
For example, Bloomin’ Brands is testing a “take-out only” store for Outback and Carrabba’s—“Outback & Carrabba’s Express.”
If you are now just getting into the off-premises sales game, keep in mind you will have an investment to secure the proper technology. Talk to your friends who are already offering off-premise. See what’s worked (or not) for them.
Expect delivery and take-out options to continue to grow and take a larger share of restaurant sales. Off-premises dining is a strategy that we cannot ignore.