This roundup will be updated following earnings releases.
Restaurant chains built out their delivery networks last year, reaching a bulk of their systems. This capacity will help grow coveted delivery sales while maintaining consistency. 2019 revealed a split in delivery strategies. While companies like McDonald’s, Wendy’s and Potbelly expanded delivery partnerships with multiple providers to reach more customers, others like Starbucks, Chili’s and Chuy's and Shake Shack honed in on one provider to negotiate better rates in 2019.
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During Q4, the company used targeted promotions that drove new customers to BJ's delivery and repeat customers. It also integrated all third-party delivery ordering into its POS system, which improved execution and service fees. In addition, BJ's added a new delivery partner that has provided incrementality alongside continued expansion of delivery sales with existing partners, CEO Greg Trojan told investors during a February earnings call.
This segment made up about 5% of sales, Greg Levin, president, CFO and secretary said.
While delivery is growing, the rate of growth has slowed and the company has consciously dialed back its promotions in that space, he said.
"We still think it’s a robust growth area as I've said often consumers are voting and continuing to purchase from … that distribution channel," Trojan said.
Outback has rolled out its partnership with DoorDash to 574 locations after rolling it out in September, Chris Meyer, Bloomin' Brands EVP and CFO, said during a February earnings call. The partnership helped bring off-premise sales to 15% of Q4 2019 revenues. Total off-premise sales were up 20% year-over-year, he said.
"Delivery is proving to be a highly incremental occasion, and third-party delivery has had little cannibalization to our own delivery network," Meyer said. "The economics are compelling, and this business offers attractive margins. We expect third-party delivery to be a strong contributor to 2020 results."
Carrabba's completed its rollout of multiple third-party delivery partners in October. Off-premise made up 21% of sales in Q4, up 32% year-over-year, he said.
Off-premise was a primary driver of sales at Chili’s during the quarter, Brinker CEO Wyman Roberts told investors during a January earnings call.
Chili’s off-premise sales grew over 31% year-over-year with delivery and to-go representing 17% of sales during Q2 fiscal year 2020, CFO Joe Taylor said. Delivery at Chili’s makes up close to 5% of the sales while it makes up 4% of Brinker International’s total sales.
The company began rolling out a white label option allowing for direct orders on its website and app in October, but third-party marketplaces make up the mid-80s percentage range in terms of orders, Taylor said.
The Cheesecake Factory
The company's off-premise business drove 17% of sales in Q4, president David Gordon said on a February earnings call. Of that, 35% was delivery, 13% was online ordering and phone-in and walk-in was about 50%, CFO and EVP Matthew Clark said during the call.
Cheesecake Factory also saw year-over-year growth in pickup orders via its online ordering platform. Gordon added that the off-premise channel has been a good testing ground for marketing initiatives.
"We continue to see growth in delivery," he said. "We continue to do really creative marketing campaigns with DoorDash and with our online ability, and we see that as a traffic driver growth driver as well, and we'll continue to pull that lever throughout the year."
The company rolled out digital make lines, digitized its make lines and expanded delivery capabilities to over 98% of Chipotle’s system, CEO Brian Niccol said during a February earnings call. Delivery contributed to the company’s digital sales surpassing $1 billion during 2019.
While the fast casual chain primarily works with DoorDash and Postmates, Niccol said it would be open to working with other providers to give customers more access to Chipotle.
“The relationship with DoorDash has been great. Working with Postmates has been great. We'll see how things unfold going forward,” he said. “But I do think ultimately the delivery marketplace is not going to be an exclusive proposition. I think the delivery marketplace is going to be about giving customers access accordingly.”
In the early days delivery was one of the biggest parts of Chipotle’s digital business, but its order-ahead business is gaining a lot of ground, Niccol said. Both order-ahead and delivery have worked nicely as a system with the addition of rewards and Chipotlane, he said.
Dine-in transactions still make up the majority of the casual dining chain’s sales, but growth from delivery contributed to a 67% increase in Denny’s off-premise business from 7% of total sales prior to the launch of Denny’s on Demand to 12% of sales during Q4 2019, CEO John Miller told investors during a February earnings call.
About 89% of its domestic system now works with at least one delivery partner, and he said the company expects long-term growth in off-premise sales as more restaurants expand their delivery channels.
Delivery transactions tend to skew toward a younger guest and the late-night crowd, he said.
Jack in the Box
Jack in the Box's entire system now offers delivery with over 95% of its restaurants working with at least one of the four major providers as of the end of the Q1 fiscal year 2020, CEO Lenny Comma told investors during a February earnings call. The company completed POS integration with Grubhub and is working with other providers to integrate into its system as well.
While the company's biggest priorities will be over improving operations and product innovation, it will continue to put modest investments toward its mobile and and delivery channels as necessary to meet expectations of guests, he said.
Delivery contributed to the company’s U.S. comp sales, which increased 5.1%, during the fourth quarter, with new delivery partners DoorDash and Grubhub driving incremental sales, CFO Kevin Ozan said during a January earnings call. The rapid scale of DoorDash is showing consistent growth, CEO Chris Kemczinski said.
Delivery is available in 25,000 restaurants worldwide, or two-thirds of the company’s global system, growing from $1 billion in sales to over $4 billion within the past year, Kempczinksi said. The company now works with multiple third-party partners in most of its major markets, adding Just Eat to its delivery platform in the U.K. in January, he said.
“We continue to see great runway ahead of us to drive awareness and trial and we are doubling down on our efforts to encourage frequency and retention,” Kempczinski said.
Restaurant Brands International
Burger King now has delivery at over 4,200 U.S. locations integrated into its POS system, Jose Cil, Restaurant Brands International CEO, told investors during a February earnings call. Many of these locations offer delivery through multiple providers, he said.
The fast food chain offers delivery at over 9,000 units globally and has a run rate business of over $1 billion for delivery, Joshua Kobza, Restaurant Brands International COO, told investors.
Popeyes rolled out delivery to over 1,600 restaurants and now makes up about $250 million in sales on an annualized basis, Kobza said.
The company now offers mobile apps, web ordering and white label delivery services, which allow guests to order directly through RBI branded delivery channels and have it fulfilled by one of its aggregator partners, he said.
Delivery has reached 75% of Starbucks’ U.S. locations and the company has now begun a national marketing program, Roz Brewer, Chief Operating Officer & Group President, Americas, said during a January earnings call. Comparatively, it had delivery in 115 stores and no marketing in January 2019, at the start of the rollout of its Uber Eats partnership. The company, along with its partner Uber Eats, added 33 markets to its delivery program and the service is available in 49 markets across 29 states, with plans to reach into nearly every state in the months ahead, according to Fast Casual.
“Our stores are equipped from a technology standpoint,” Brewer said. “The partners are well-trained in terms of how to handle the tradeoff between the transition of the beverage to the pickup delivery person.”
Adoption rates among U.S. customers has been modest, however, compared to China, where delivery made up 9% of sales during the Q1 fiscal year 2020.
The chain will continue to highlight delivery in its national TV marketing in a push to digitize every transaction, CEO Charlie Morrison said on a company earnings call in February. The company ended 2019 with 39% of sales coming through digital channels, and digital made up more than 40% of sales in January.
Wingstop’' average digital check is $5 more than non-digital orders, Morrison said. The company also opened its first ghost kitchen in the U.K. in Q4, a strategy Morrison anticipates will shape its international business in 2020. He estimates that Wingstop's total off-premise business drives about 80% of sales.
The company continues to roll out delivery and click-and-collect across its brands through its exclusive partnership with Grubhub. At KFC U.S., delivery expanded to over 2,800 locations with click-and-collect reaching 3,800 restaurants, Yum Brands CEO David Gibbs told investors during a February earnings call.
For Pizza Hut U.S., which has been in transition, the company will upgrade its technology for online ordering and delivery and will focus on more consistent execution in customer experience across delivery and carryout as part of its overall strategy, Gibbs said.
While delivery is a growing business, the company also remains focused on making sure its click-and-collect model works well. With delivery costing more, not all customers will want to use that service, he said.
“For those customers that want delivery, we're leaning in there,” Gibbs said. “And for those that are more carryout focused or dine-in focused, we have programs for them too.”