How Full Service Restaurants Can Survive the Off-Premises Trend

Off-premises ordering totaled $209 billion in 2019 according to some estimates, and the majority, 59.3%, still involved takeout for pickup. With the rise of third-party delivery platforms, more full service restaurants (FSRs) are relying on delivery to grow their sales. Looking at Figure 1 below, third-party delivery has a lot of room left to grow, representing only 6.2% of total off-premises sales.

Breakdown of 2019 Off-Premises Sales

Breakdown of 2019 Off-Premises Sales

Figure 1 – Percent of total off-premises sales for each category of off-premises ordering according to 2019 estimates (source: Forbes article)

Between now and 2022, Applebee’s expects to grow its off-premises orders from 9% to 18% of total sales, showing that even “America’s kitchen table,” as Applebee’s president John Cywinski describes the FSR chain, is targeting more consumers who just want to stay in and eat on their couches.

Just this past December, same-store sales dropped 2.1% from the previous year for the restaurant industry as a whole, the worst decline in two years. In order to address this issue, more FSRs are changing their design, packaging and product offerings to appeal to consumers’ changing habits. Here are some ways your full service restaurant can make these modifications without compromising your brand’s reputation:

Rethink Your Restaurant’s Design

Steve Starr, president of restaurant design firm Starrdesign, focuses on helping restaurants capture more off-premises sales in three ways: retrofitting existing locations, improving back of house workflows, and developing new designs for soon-to-open stores.

Starr only recommends the retrofit option if off-premises sales meet or exceed 35% of your restaurant’s total sales in order to avoid unnecessary complications for dine-in customers. After all, this option involves rethinking your front of house design to make room for delivery drivers and caterers to pick up their orders, and drastic changes to this space could negatively affect in-store check averages if they annoy your dine-in guests, such as if you were to remove booths to accommodate delivery order shelves and your customers start complaining about the lack of comfortable seating.

For back of house design, Starr says to use predictive analytics to guide your design decisions, such as whether to create second makelines for off-premises orders and even when to staff this separate area of the kitchen by analyzing historical peak times for delivery if you have been offering this option for some time. Starr advises restaurants to build new locations based on geography and delivery time, such as a larger store to handle dine-in orders and a smaller venue within a relatively close radius to your target market in order to focus mainly on off-premises sales.

Buy Quality Packaging

Picture one of your customers ordering chicken parmesan to go, only to find the plastic container partially melted at the bottom. Or maybe someone’s soup order is lukewarm, with the flimsy container only keeping it hot for half the journey to their house. As a greater number of restaurants offer to-go orders in various forms, packaging becomes more important than ever in the effort to maintain the food quality and brand image your customers expect.

According to an article republished by US Foods, casual dining chains that sell a lot of takeout do not mind paying a higher cost for packaging if it preserves the flavor of their food and the experience customers would get if they ate inside the restaurant. With off-premises sales amounting to 40% of its business, Newk’s Eatery’s main goal is to create a sense of consistency with customers that, over time, earns their loyalty. The casual dining concept knows its customers tailgate, so it made its packaging thicker to withstand bulk orders that may be stacked on top of each other. Mike Clock, Newk’s president and CFO, partly attributes the success of the packaging upgrades to tighter seals that allow food to sit out longer without losing temperature as quickly as cheaper containers – making it ideal for tailgating.

Revise Your Product Offerings

Imagine if your full service restaurant offered highly rated sizzling steak fajita bowls for years before starting off-premises sales, only to find negative reviews on Grubhub for the same entrée once you start delivering. While dine-in customers hear the appealing sound of the steak crackling hot off the skillet and see the juices bubbling, off-premises customers only see the steam’s condensation as it drips on their pants from the plastic cover they have to lift off their order. If there is no practical way to recreate the sizzling, fresh appearance of a dine-in order, you should reconsider offering this food item for delivery. According to Eat This, Not That!, a publication that offers food ordering advice to consumers, cooked eggs are another less than ideal delivery item because of their tendency to smell when sitting in a container for too long.

To address these challenges, one New York City restaurant chain created a different menu specially optimized for delivery orders. The 26-store company, Dig Inn, even has its own director of off-site sales to oversee food quality, order accuracy and delivery times to ensure that any menu modifications are fulfilling its overall goal to create the best experience possible for off-premises orders. To distinguish this new endeavor from its traditional dine-in offerings, Dig Inn created a brand for its new menu called Room Service and has a separate kitchen to prepare off-premises orders. The company ensures order accuracy by reducing customizations and increasing pre-determined combinations of food items, allowing consumers to still experience a variety of food without running the risk of getting the wrong topping or side dish.

For more information on the off-premises trend sweeping the restaurant industry, check out our post on optimizing your restaurant for off-premises customers.

Brink Cloud POS Software: Schedule your Brink Demo