This roundup will be update weekly following earnings releases.
From McDonald's to Starbucks, delivery initiatives were ramped up during the most recent quarter with expectations of reaching a national footprint in the coming months. Restaurant companies continue to expand their digital offerings to make delivery and off-premise ordering easier for customers to keep sales flowing. Brands have started branching out from exclusive partnerships and are adding multiple delivery providers as a way to reach new customers. While delivery remains largely incremental, it also continues to produce higher average checks.
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Off-premise continues to grow at over 20%, BJ's Restaurant CEO and Director Gregory Trojan told investors during the company's Q2 2019 earnings call. Ongoing systems and operational improvements that the restaurant and its delivery partners are doing are helping produce solid guest experiences and improve net promoter scores for orders sourced from its website and online.
Delivery has started to slow down, and it's not as strong of a tailwind as it was a year ago, but it is still a tailwind, he said.
The company is testing different promotions to trial with its delivery offers, such as a free Pizookie with DoorDash, but ended up trending at a lower take rate than offering free delivery, he said. This promotion offered a free Pizookie based on spending of $19.95.
Off-premise makes up about 10% of sales split between delivery and takeout, BJ’s Restaurant President, CFO & Secretary Gregory Levin said.
"One of the things that we're encouraged to see is that our takeout business lately has been growing and obviously we like takeout a little bit more because you don't pay those commissions to the delivery companies," Levin said.
Its large party catering business is still in its early days after the launch of a new menu, website and ordering process, but the company reports traffic and off-premise check growth increases related to catering, Trojan said.
Delivery is now available at 630 units across Outback and Carrabba's brands at the end of Q2, Dave Deno told investors during the company’s Q2 2019 earnings call. These locations exceeded internal benchmarks against several key metrics, including delivery time. With the company’s delivery rollout nearly complete, it will focus on marketing tactics to drive awareness, Deno said.
The company continues to test its own in-house delivery platform as well as third-party service providers, he said. It recently solidified a partnership with an undisclosed national third-party delivery provider.
Off-premise now makes up about 14% of sales during the quarter, up by 18% year-over year, Bloomin' Brands EVP and CFO Chris Meyer said.
The company is also testing different designs for its interior remodel program at Outback, Deno said. The new design aims to modernize the look and expand its off-premise area to handle a higher expected volume. The company plans a soft rollout this year and will ramp up remodels next year.
After two years of testing, the company entered into an exclusive partnership with DoorDash to offer delivery with Chili’s, Brinker CEO and President Wyman Roberts said during the company’s fiscal year fourth-quarter 2019 earnings call. The partnership allows for delivery orders to be integrated into its existing operational system, providing a more streamlined experience for its guests and team members, he said. Two months into the rollout, delivery has been incremental to off-premise growth.
Incrementality has been in excess of 80% for delivery, Brinker CFO Joe Taylor said. Those numbers are expected to continue going forward.
The company doesn’t have plans to offer its three for $10 deal, which was a compelling offer for both lunch and dinner during the fiscal year, Roberts said. It remains an option for pickup orders, where the company believes customers are more value focused and would rather choose pickup than pay more for delivery, Taylor said.
Chili’s takeout business grew in the solid teens throughout fiscal year 2019 aided by its investments in technology, Roberts said.
The Cheesecake Factory
Off-premise made up 16% of total sales during Q2 2019, The Cheesecake Factory President David Gordon told investors during its Q2 2019 earnings call. Delivery made up 35% of off-premise sales and online ordering comprised of 13%, while 50% of guests ordered via phone, Gordon said.
The company started using new packaging during the last quarter that helped food travel at the appropriate temperature and maintaining the food’s quality so it was closer to the dine-in experience, he said.
Following its acquisition of Fox Restaurant Concepts, which has some brands already using DoorDash in select markets, the company plans to grow the off-premise business with this now wholly owned restaurant group, Gordon said.
Off-premise is helping drive significant comparable sales growth of 10% during the second quarter, which included about 7% of transaction growth, CEO Brian Niccol said during the company's Q2 2019 earnings call with investors. Chipotle's digital sales grew 99% year-over-year to $262 million and made up 18.2% of sales during the second quarter.
The company also benefited from several promotions that made Chipotle visible including a free delivery promotion with a prominent influencer for National Burrito Day. These promotions can attract new customers and result in higher delivery sales even after the promotion, Niccol said.
"Delivery remains a key driver of our digital growth given enhanced capabilities on our app and website, as well as our expanded reach," Niccol said.
Delivery has now been rolled out to 95% of its restaurants, he said. Mobile order and pickup shelves, as well as digital make lines have been added to 2,000 restaurants and 16 restaurants now have Chipotlanes, the company’s new mobile order and pay drive-thrus, he said. Catering, which has been a small portion of the company’s order-ahead business, presents "tremendous opportunity" as well, Niccol said.
To-go sales ordered through the company’s website represented about 18% of all to-go ordering, Chuy’s President and CEO Steve Hislop told investors during its Q2 2019 earnings call. Off-premise overall made up 13.4% of the company’s Q2 sales mix, VP and CFO Jon Howie said.
Its partnership with digital food ordering platform Olo has helped improve online ordering adoption and Olo’s Dispatch service allows the company to synchronize its online ordering and delivery process for improved efficiency and accuracy. The program also connects customers with different delivery options directly from the Chuy’s website. The restaurant plans to integrate Dispatch into all of its stores by the end of the year.
Catering contributed $1.5 million in revenue compared to $400,000 during the prior year period. The company added two more markets to its catering platform during the second quarter and plans to add four more markets by the end of the year.
Off-premise was a meaningful contributor to the company’s top line results during the fiscal year 2019 fourth quarter, Cracker Barrel CEO Sandy Cochran told investors during a September earnings call. Off-premise made up 9% of sales for the fiscal year, which is an increase of 150 basis points compared to the prior year. The company expects to reach 10% by the end of fiscal year 2020.
Cracker Barrel plans to accelerate off-premise growth through additional third-party delivery, with plans to add delivery to 150 more stores by the end of the next fiscal year, and improving the off-premise customer experience, she said. Third-party delivery reached over 450 stores at the end of fiscal year 2019, she said.
Individual to-go orders are the biggest component of the company’s off-premise business, Cochran said.
“Within that, third-party delivery has been a surprisingly big part of that business. And we do believe that that is largely incremental,” Cochran said.
The off-premise team is working on ways to add to existing orders such as beverages or desserts or upselling, and figuring out how that would work through a digital app or through recommendations on the phone, especially since to-go orders don’t have the same beverage attachments that exist with dine-in sales, she said.
Catering also continues to be a growing business, and Cracker Barrel invested in its catering vans and catering services managers, she said.
The casual dining brand continues to expand its off-premise strategy to reach younger guests and increase brand awareness, Denny’s President and CEO John Miller told investors during the company's Q2 2019 earnings call. Off-premise sales now make up over 11% of total sales, up from 7% in mid-2017 when the company launched Denny’s On-Demand, Miller said.
Restaurants actively engaging with at least one delivery partner reached 88% of Denny’s system by the end of the quarter, up from 79% at the start of Q2 2019, he said. Total margins for delivery range from the low teens to upper 20%, after discounting taxes, delivery fees and food costs, Miller said.
Del Taco has been working with Grubhub at nearly all of its company-owned restaurants with the service live at over half of its franchised restaurants or in the process of adding, President and CEO John Cappasola said during the company's Q2 2019 earnings call with investors.
The company’s long-term plan is to maximize demand through offering multiple delivery service providers, he said. Del Taco is in the process of testing POS integration for Postmates and DoorDash and plans to offer Postmates during the third quarter and DoorDash during the fourth quarter, Cappasola said.
The company also added functionality for online ordering for pickup or delivery, he said. The app has over 675,000 users.
In August, the company expanded its partnership with Grubhub to over 1,700 Applebee’s and 1,300 IHOPs, nearly tripling the number of Dine Brand restaurants available on Grubhub’s marketplace, according to a press release. The two companies will work toward direct-to-POS integration for menu syncing and orders. Grubhub will also work with Dine Brands to address franchisee needs and requirements. Franchisees working with Grubhub as their prefered marketplace will also have access to marketing benefits and analytics.
Off-premise continues to provide strong growth potential for both Applebee's and IHOP with both brands boosting off-premise comp sales during Q2, Dine Brands CEO and Director Stephen Joyce told investors during the company's Q2 2019 earnings call. The company also negotiated with delivery service providers to get more favorable terms for both brands, Joyce said.
At Applebee's, off-premise comp sales were up 27% on top of last year’s 31% growth, in large part due to delivery, Applebee's President John Cywinski said. About 65% of Applebee’s off-premise orders were placed digitally or online, he said. About 75% of off-premise is to-go while 25% is delivery. Cywinski expects this mix to evolve with delivery reaching 1,500 restaurants by the end of the year.
Off-premise comp sales increased 39%, primarily due to a 26% increase in traffic, IHOP President Jay Johns said. The company's fully integrated online ordering system on its website and app have allowed the company to grow off-premise to about 9% of total sales, he said. The company expects additional growth potential for off-premise, especially as it expands its platform through national providers such as DoorDash, Grubhub and Uber Eats. Over 1,300 restaurants use DoorDash and 1,400 units, or 83% of its domestic system have at least one delivery partner, Johns said.
IHOP also sees catering as an opportunity to broaden sales and expects to launch this platform during the fourth quarter, Johns said.
On-the-Go ordering for Dunkin’ saw its average weekly sales increase 30% for a year-over-year increase of 30% and comprised 4% of all purchasing transactions in Q2 2019, CEO David Hoffmann said during an earnings call on Thursday. In certain metropolitan areas during peak hours, orders on the mobile app made up over one-quarter of purchases, according to Hoffmann.
The company plans to rollout mobile order and pay to non-loyalty members with a "guest checkout" function on the app. Hoffmann noted that almost 50% of active loyalty, or Perks Rewards members, used On-the-Go mobile ordering during the last quarter.
Hoffmann also reaffirmed the company's plans, announced in June, to expand its New York City delivery program with Grubhub to several other major cities by year end.
El Pollo Loco
The Mexican QSR launched a new e-commerce website and mobile app in early July that simplifies ordering delivery and takeout, CEO Bernard Acoca said during the company’s Q2 2019 earnings call. The chain is also testing delivery with Postmates and Uber Eats, in addition to its partnership with DoorDash, and plans to expand the pilot systemwide in September, he said.
The test uses a limited menu that focuses on family meals and unique combos at a higher price point. When diners order delivery via El Pollo Loco's loyalty program or website, they still have access to the full menu at a regular menu price, Acoca said. The curated family-style menu is currently available via DoorDash, and the company hopes it will drive stronger sales through third-party channels. Delivery currently makes up less than 2% of El Pollo Loco's business, Acoca said, but the company plans to begin aggressively marketing the service.
Same-store sales for to-go increased 2.2%, driven by third-party delivery, according to an SEC filing. Comparatively, dine-in same-store sales decreased by 2.7% and catering decline same-store sales by 0.3% during the quarter compared to the year ago period. To-go and catering represented 36% and 13% of net restaurant sales, respectively.
Delivery has been “incredibly successful” for the company, which has been a pioneer partner in the delivery space through its tests with Postmates and Uber Eats, CEO and President Andy Wiederhorn told investors during the company’s Q2 2019 earnings call. Delivery has been fully implemented across its Fatburger restaurants and the company is midway through implementing it across its other brands.
Fiesta Restaurant Group
Delivery represents about 2% of sales at Pollo Tropical and 1.5% for Taco Cabana, Fiesta Restaurant Group President and CEO Rich Stockinger told investors during the Q2 2019 earnings call. The company expects this segment to make up 10% to 15% of sales based on the trends in the industry, he said.
Even though sales are proving to be increasingly incremental, the company will remain mindful of the additional costs associated with the delivery and has started to increase Pollo Tropical and Taco Cabana menu prices for orders placed through DoorDash, Stockinger said.
The company has also been positioning itself as a compelling business-to-business and business-to-consumer catering option by investing in additional infrastructure, including catering hub units and new delivery vehicles, Stockinger said. In July, the company launched a new catering menu, better aligning it with its retail menu. In addition to offering party platters of various sizes to appeal to family and social gatherings, the company also lowered the prices of its catering menu. It also plans to launch a new catering menu for Taco Cabana with lower prices.
Habit Burger and Grill
The burger chain has partnered with two third-party delivery providers, including DoorDash and adding Postmates last quarter, CEO Russ Bendel told investors during the company's Q2 2019 earnings call. So far, delivery has yielded higher checks compared to dine-in or carryout business, he said.
The company’s online ordering platform and mobile-optimized website posted an increase in same-store sales of 16.8% during Q2. The company soft launched its new customized mobile ordering app at all its locations on July 17 after testing the app in three markets over six months, Bendel said.
While the app was developed for pickup, the company could consider using it for delivery in the future, CFO Ira Fils said.
Jack in the Box
Third-party delivery currently covers over 90% of the fast food chain’s system and it is working to expand this reach, Jack in the Box Chairman and CEO Lenny Comma told investors during its fiscal year Q3 2019 earnings call. The company’s sales per store for delivery more than doubled during Q3 compared to last year, he said. The company is working with its delivery partners to integrate their systems into Jack in the Box’s POS system so there won’t be separate tablets, he said.
Delivery and digital sales still make up a small percentage of its business, however, with 70% of its customers using the drive-thru, Comma said. To improve the drive-thru experience, the company is considering new prototypes that can offer better convenience and amenities such as digital menu boards, canopies and designated parking for pickup and delivery. These prototypes are expected to be rolled out in 2020, he said.
McDonald's CEO Steve Easterbrook told investors during the company's Q2 2019 earnings call that the company expects its global delivery business to have $4 billion in sales in 2019. Restaurants that have had delivery available for at least 12 months have already seen double-digit delivery growth. Delivery orders also are twice the size of an average check, he said.
Delivery via Uber Eats is already at 9,000 restaurants, and its new partnership with DoorDash will provide more options for operators and reach untapped customers, Easterbrook said. It launched a partnership with DoorDash at 200 Houston restaurants in July and plans to scale its DoorDash footprint to about 9,000 restaurants by the end of August, Easterbrook said. Roughly 8,000 restaurants will have two third-party operators depending on coverage, while 1,200 will have one or the other, he said.
The company also has been working with operators on how to ease commission pressure to make delivery more worthwhile, Easterbrook said.
"We want them to make money out of it, and we as a company will make money as a result," he said.
Multiple delivery options are the standard across several countries, he said. Customers are typically loyal to one third-party app so adding more options for delivery provides new customers, which helps improve incremental sales and thus cash flow to operators, Easterbrook said.
Noodles & Company
Noodle & Company’s digital ordering, including delivery, has grown 47% year-over-year to 22% of sales, said CEO Dave Boennighausen during a Q2 earnings call on Tuesday. The company is planning a relaunch of its digital presence to simplify order customization for guests, and will begin testing direct delivery from its website using a third-party, Boennighausen said.
Delivery comprised 6.6% of its sales over the last quarter, up from 5% during Q1. Third-party delivery fees for the company also rose to 1.5% of sales, up from 1.1% in the previous quarter. Orders via delivery from Noodles & Company have a higher per person spend, according to Boennighausen. The company also has plans for a relaunch of its catering services in 2020, as catering currently comprises less than 2% of its overall sales.
The casual chain grew off-premise sales by 12%, which makes up 14% of overall sales, Darden CEO Gene Lee told investors during a September earnings call. It also has been focusing on growing digital sales from mobile and desktop. Digital sales grew over 30% and make up 40% of the restaurant’s to-go sales.
The company still remains against delivery, with the exception of its existing catering delivery, even though the cost is starting to shift from the company to consumer, Lee said.
“Our job is to create a compelling off-premise experience right now that -- with so much value that the consumer is willing to come and get it,” he said. “That seems to be working for us and we’re going to continue to focus on that.
Working with Drivosity, the company has brought GPS-enabled delivery tracking to over 1,000 U.S. restaurants -- which is more than double from the previous quarter, adding a competitive edge against its pizza delivery competitors, Papa John’s President and CEO Steve Ritchie told investors during the company’s Q2 2019 earnings call.
Papa John’s is close to fully deploying its partnerships with DoorDash and Postmates, both of which have been in effect for over a year. So far, being on these channels has had a modest impact on sales, but Ritchie said he expects it to be a substantial growth opportunity in the future. Papa John’s found that there is an outsized portion of new customers coming in through these platforms, he said.
The company also plans to talk to additional large national aggregators, Ritchie said.
Papa John’s added location-based delivery in over 150 U.K. locations this summer. Customers go on Papa John's app and find the nearest geotagged location and order as normal, similar to Domino’s Hotspots feature. It also is rolling out GPS driver tracking software in the U.S. allowing customers to track where their delivery driver is and how far out they are from arrival.
Against an overall same-store sales drop of 4% on the quarter, Potbelly saw a 10.1% increase in off-premise and digital sales, CEO Alan Johnson told investors in the company’s quarterly earnings call on Wednesday. Since launching its partnership with DoorDash five weeks ago, the company witnessed almost a tenfold lift in its growth in the marketplace.
Johnson attributed the sandwich chain’s off-premise and digital sales growth — which comprises around 20% of its business — to a redesign of its catering website, the rollout of pickup racks across all stores and its collaboration with DoorDash. The most significant driver of off-premise growth was its catering website design, according to Johnson: Potbelly customers spend 10 times more on a catering order than on an average walk-in order.
Responding to an analyst’s question on potentially closing underperforming stores to focus investments in high-performance stores and off-premise operations, CFO Tom Fitzgerald said that the company is continuing to monitor store productivity and would consider exiting shops where it is economically advantageous.
Off-premise now comprises 12.5% of sales at the casual dining company, interim CEO Pattye Moore told investors during an August earnings call.
CFO Lynn Schweinfurth said the company expects higher third-party delivery sales via higher organic growth, additional delivery coverage and the addition of a new service provider to a majority of its system. The company is also testing delivery for orders placed directly through Red Robin to better control the ordering experience, retain order and guest history and leverage its loyalty program, but plans to use third-party operators for those deliveries.
As part of its tech initiatives, the company is also planning to replace third-party delivery provider tablets with direct integration with its POS system, Schweinfurth said.
Catering is also growing and providing long-term potential, Schweinfurth said. The company hired a new catering director and added sales team resources. The company is focusing on driving business-to-business national accounts and expand its beverage offerings, she said.
Restaurant Brands International
Delivery has reached 3,500 Burger King restaurants in the U.S. and led to significant growth in sales for each restaurant per day, Restaurant Brands International COO Joshua Kobza told investors during its Q2 2019 earnings call Friday. The company first partnered with DoorDash, but has since added Uber Eats as well. Kobza added that Burger King will start rolling out coverage with multiple aggregators in the coming months.
Romano's Macaroni Grill
The 83-unit casual dining chain expanded its delivery service across the U.S. via online ordering on its website, according to a press release. The company works with Uber Eats, Grubhub, Postmates and DoorDash and lists which providers are available by location on its website.
Delivery is still in its early days in the U.S. and has yet to make a meaningful contribution to Starbucks' business results, CEO Kevin Johnson told investors during the company’s Q3 fiscal year 2019 earnings call.
Its loyalty and rewards program is growing significantly, increasing membership 14% year-over-year to reach 17.2 million active members. Along with its enhancements of the Starbucks Rewards Program, adoption of mobile order and pay and personalized marketing efforts contributed nearly 2% of comp sales growth in the U.S. during the quarter, Johnson said.
While delivery in the U.S. has moved much slower than in China, where delivery made up 6% of sales during the recent quarter, COO and Group President Americas Roz Brewer told investors there have been encouraging signs in the U.S. to move its partnership with Uber Eats nationwide. During its pilot, the company made sure that it had good software integration and that delivery could be executed at the store level first.
The company will expand its 11-market rollout nationally in early 2020, according to a press release. The two companies will focus on delivery packaging, in-store operations and quick order-to-door delivery window.
Same store sales grew 3.6%, with digital channels and delivery key contributors to these results, CEO Randy Garutti told investors during the company’s Q2 2019 earnings call. The company formalized its partnership with Grubhub, and a small number of Shacks have Grubhub today. The company anticipates a gradual rollout over the next two to three quarters, Garutti said. During this time, he said there will be some volatility with delivery sales through the end of the year and in certain parts of the country.
The company currently works with Caviar, Postmates and DoorDash and will continue to do so, but as the Grubhub rollout reaches mass scale, it won’t market these relationships anymore, Garutti said. It also will work to move its customers over to Grubhub, he said.
With the restaurant using more digital channels and orders coming in from its app, website and large orders, the front of the house is getting more complicated. The company is looking at solutions to offer better pickup areas with good shelving to make driver pickups and mobile app pickups better. By next year, Shack plans to offer designs that will have separate sections for digital pickup versus in-house pickups, he said.
Its partnership with Grubhub also will help operations by using Just In Time delivery, which times drivers to the moment an order is ready, allowing for faster delivery and better food quality at the time of delivery, according to a press release.
“Delivery is a hard business,” Garutti said. “Shake Shack's food is hard to deliver and we need to do it really, really well.”
By the end of the second quarter, 80% of its North American restaurants were on a delivery platform, Wendy’s President and CEO Todd Penegor told investors during the Q2 2019 earnings call. The company is on track to complete its integration of delivery into its mobile app by the end of the year. Mobile ordering is now available in over 90% of the U.S. system and is on track to reach all of Wendy’s North American restaurants by the end of the year.
The company is working with DoorDash to get delivery fully integrated into its POS system, he said. The chain is working on improving its delivery times to be around or under the 30-minute mark and sees POS integration as a way to shorten the ordering time and improve accuracy and delivery times, Penegor said.
White Castle partnered with Uber Eats in July to offer delivery to its 330 locations in the U.S. As part of its partnership and the 15th anniversary of "Harold & Kumar Go To White Castle," the fast food chain started giving away 1 million Original Sliders on July 30 via Uber Eats.
Delivery continues to be a top-line growth driver with the sales mix being reported in the high single- to low double-digits in markets where the service is available, Wingstop Chairman, President and CEO Charlie Morrison told investors during the company’s Q2 2019 earnings call. By April, all of its company-owned stores offered delivery, and the company plans to make it available at 80% of its U.S. restaurants by the end of the year.
With more advertising efforts from its delivery partners, including DoorDash, Wingstop had increased costs related to commission rates, which tend to be higher in DoorDash's marketplace, Morrison said. The company worked with the third-party delivery provider to rebuild its pricing and commission structure for its marketplace transactions, which will be put into place during Q3, he said.
KFC’s partnership with Grubhub continued during the quarter and is now available at 2,300 restaurants, said Greg Creed, CEO of Yum Brands, during an earnings call. Customers can use click and collect at 3,500 restaurants. In addition, the company expects to have a branded web experience by the end of the year.
Pizza Hut’s partnership with Grubhub is currently offered at over 300 locations, and the company plans for greater expansion during Q3, Creed said. While the orders are placed on Grubhub, Pizza Hut drivers deliver it.
The pizza chains also plans to close some of its underperforming stores in the U.S. and replace them with a modern fast casual-focused restaurant heavily weighted toward delivery and carryout.
Taco Bell delivers from 4,500 locations in the U.S. and has over 11 million registered users online. Mobile and online ordering for delivery and click-and-collect continues to be a priority, Creed said.