This roundup will be update weekly following earnings releases.
Exclusive partnerships with third-party delivery partnerships are no longer the predominant trend within the restaurant industry, with McDonald’s, Wendy’s and Potbelly adding multiple delivery partnerships. McDonald’s entered an exclusive agreement with Uber Eats in 2017, but ended the exclusivity this summer by teaming with DoorDash and Grubhub as well. Restaurants are embracing a multi-platform strategy to expand their delivery footprints and reach more customers, especially since many diners are loyal to a particular delivery platforms.
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The company’s company-owned comp sales grew 7%, driven by a 34% increase in catering and a 10% increase in to-go orders, according to an earnings release. Same-store sales for to-go and catering increased 1.5% and 2.2%, respectively. To-go and catering represented 33% and 20% of restaurant sales during the quarter, respectively.
Delivery did not grow as quickly as last year, when the company completed its rollout of delivery across its restaurants, BJ's CEO Gregory Trojan told investors during an October earnings call. The pace of growth was impacted by the company's pullback of third-party delivery promotions and additional competition from other restaurant concepts on delivery marketplaces. Trojan said even though the pace of delivery sales reduced, it is still growing and the company prefers a profitable foundation.
"But the overall underlying business delivery is solid for us," Gregory Levin, the company's president, CFO and secretary told investors. "It grew double digits in this quarter, and we think it's an important part of our business."
BJ's launched a catering platform in spring with a new menu, website and order processing and is already seeing 25% growth even though it is a smaller book of business than delivery, Trojan said. The company expects the catering platform to help holiday comparable sales.
The company’s partnership with DoorDash, which launched in September, has been rolled out to over 550 Outback restaurants, CEO Dave Deno told investors during a November earnings call. The company expects the new channel will complement its already existing in-house program.
“Our research suggests this is a different type of delivery consumer with distinct purchasing patterns and continues to be highly incremental,” Deno said.
Direct delivery has been strong and there has been little to no cannibalization of business from the DoorDash partnership, he said.
Chief Financial Officer Chris Meyer said the company expects third-party delivery to be a strong contributor to company results during the fourth quarter and into 2020.
Carraba’s has been using multiple third-party delivery providers to complement its own delivery network, and the third-party rollout was completed in September. Its off-premise business was 17% of sales during Q3 compared to 14% in a year ago, he said. For Outback, the off-premise mix increased to 14% during the quarter, a 13% increase year-over-year, Meyer said.
Off-premise sales, which includes to-go and delivery, now makes up 15% of total sales at Chili’s as of the first fiscal quarter of 2020, Chief Financial Officer Joe Taylor told investors during an October earnings call. Two-thirds of the company’s off-premise sales come through digital channels, CEO Wyman Roberts said.
The restaurant has several initiatives that it has yet to roll out that will build on the momentum of delivery, like its takeout business, CEO Wyman Roberts said. It is now in its ninth quarter of positive comps on takeout and Roberts said he thinks delivery can have a similar long runway with delivery.
The company, which has an exclusive relationship with DoorDash, has found that diners tend to order delivery for dinner, but lunch delivery is also strong, he said.
To improve margins, the company is looking at alternative packaging to improve the guest experience and new staffing models, Roberts said.
The Cheesecake Factory
Off-premise made up a total of 16% of sales with delivery making up 35% of off-premise during the third quarter, Chairman and CEO David Overton told investors during an October earnings call. Online ordering is about 13% of sales with phone-in about half of all transactions.
The casual dining brand recently renegotiated and extended its delivery agreement with DoorDash, which will improve the delivery economics, President David Gordon told investors. Year-over-year growth continues across both its online order and pickup orders, he said.
Digital marketing spend is up and included a content series on BuzzFeed’s YouTube channel Tasty to highlight its ingredients and cooking techniques, which garnered over 700,000 views, Gordon said.
The company also extended delivery to its newly acquired North Italia and Fox Restaurant Concept stores, he said.
Digital sales grew 88% year-over-year to $257 million and represented 18.3% of sales during the quarter, Chipotle CEO Brian Niccol told investors during an October earnings call. Delivery was a key driver of its digital growth following enhanced capabilities with its app and website and availability in over 97% of its restaurants, he said.
“Importantly, digital remains highly incremental and we continue to see residual lift in delivery sales that lasts beyond any promotion,” he said.
The company has completed the installation of digital make lines in all relevant restaurants, making its system more efficient for guests, team members and delivery partners, he said. The company is also expanding its Chipoltanes, which offer mobile order pickups by drive-thru. The company expects 60 of these restaurants to open by the end of the year.
Off-premise made up about 12.9% of sales during the quarter, an increase of 13.7% year-over-year, and delivery represented about 2.5% of percentage, VP and CFO Jon Howie told investors during a November earnings call.
The company tested the Dispatch service, which integrates third-party delivery platforms into a company’s existing systems, in two restaurants as part of its partnership with Olo, Steve Hislop, Chuy’s president and CEO, told investors. The system allows the company to synchronize online ordering and the delivery process to increase efficiency and order accuracy, which will increase margins on these orders, Hislop said.
Early customer feedback has been positive and customers like having various delivery options available on the company’s website, he said. Chuy’s will expand this service to more stores during the fourth quarter and plans to make it available systemwide by the end of the first quarter, Hislop said.
The company is also in the process of negotiating a national contract with a third-party provider that will integrate its system into Chuy’s to make delivery more efficient, he said.
Catering, which was rolled out to two additional markets during the third quarter, contributed about $1.5 million in revenue during Q3 compared to $369,000 in the year-ago period, Hislop said. The company will add two more markets during the fourth quarter, he said.
Del Taco, which originally worked only with Grubhub, expanded its third-party delivery partnerships of late, launching a partnership with Postmates during the third quarter, CEO John Cappasola told investors during an October earnings call. The partnership immediately led to favorable results with the restaurant tripling its third-party marketplace delivery incidents during the most recent four weeks compared to the prior run rate when it only had one partner.
By the end of the year, Del Taco plans to launch its third delivery service provider, DoorDash, which Cappasola said “represents a viable opportunity to further expand our reach,” with the delivery provider growing market share in many of Del Taco’s markets.
Delivery during late snack and graveyard dayparts also has shown encouraging results, especially since there is significant capacity and less competition with few fast casual, casual and QSRs open late at night, he said.
The Del App has over 800,000 registered users and all company stores accept mobile orders through the app for pickup or delivery. Over 100 franchised restaurants are live or in the process of adding this capability, Cappasola said.
Off-premise sales represented about 11% of the company's total sales during its third quarter, up from 7% when the company launched Denny’s On-Demand in mid-2017, President and CEO John Miller told investors during an October earnings call.
About 88% of the company's domestic system now offers delivery with at least one third-party provider. This channel is driving expansion of the casual brand's off-premise business, he said. Delivery continues to be incremental and has margins in the low teens to upper 20s percent after cost, labor and delivery fees, he added. He expects delivery penetration within its system to reach into the mid-90s over time and the off-premise sales to modestly expand.
Dine Brands negotiated new contracts with delivery service providers to "make delivery fully profitable for franchisees," CFO Thomas Song said during the company's October earnings call. In the first half of 2019, EBITDA margins shrunk 1% because fees from delivery partners rose.
At Applebee's, to-go makes up about 70% of the chain's off-premise mix, and franchisees are improving restaurant execution of order accuracy and timing, Applebee's President John Cywinski said. More than 1,400 Applebee's offer delivery through the brand’s website and multiple third-party platforms. About 65% of Applebee's off-premise orders are placed digitally.
Catering has also been rolled out nationwide, and the restaurant plans to leverage "this opportunity aggressively in 2020," Cywinski said.
IHOP hopes to grow its to-go business to make up 15% of sales, IHOP President Jay Johns said on the call. Delivery drives about one-third of total off-premise sales, and the chain plans to continue expanding delivery. Right now, the service is available in 1,400 stores with at least one delivery partner, four times the number of participating restaurants last year, Johns said.
At the close of the third quarter, IHOP launched catering in almost 700 restaurants, and another 200 stores are expected to offer the service by the end of the year. IHOP will continue to expand the platform next year.
Competition from third-party delivery providers continues to negatively impact Domino’s delivery business, but the company is working on additional marketing and campaigns, CEO Ritch Allison told investors during an October earnings call. It launched its delivery insurance campaign in September as a spinoff of its carryout insurance campaign. If anything happened to a pizza during delivery, Domino’s will send a free pizza.
“It reinforces our commitment to delivery with new features that enable customers to give us real-time feedback and also showcases our commitment to make every delivery a great delivery,” Allison said.
The company is also growing its carryout business, which is about 45% of the total orders, and is significantly larger than the delivery segment today.
Dunkin's partnership with Grubhub, which provides POS integration and launched over the summer, is live in three major markets in New York, Boston and Philadelphia, Stephanie Meltzer Paul, Dunkin' Brands head of digital, told investors during an October earnings call. While the company is excited about this relationship, it is still continuing its relationship with DoorDash and is open to working with more delivery partners, she said.
The company wants to increase convenience for customers through any channel, CEO and President David Hoffmann said during the call.
The restaurant processed over 18 million on-the-go mobile orders during the third quarter, which was an increase of 25% year-over-year, Hoffmann said. During the quarter, it expanded its mobile on the go capabilities by adding guest ordering and made its DD Perks program more flexible by allowing members to earn points no matter how they pay, he said.
El Pollo Loco
The company believes its strong results during the quarter, which included system comparable sales growth of 4.2% in September, was driven by its delivery expansion, Bernard Acoca, El Pollo Loco president, CEO and director, told investors during an October earnings call. The company's delivery mix increased from 1% to 3% during the quarter, Acoca said.
El Pollo Loco added relationships with Postmates and Uber Eats to supplement its DoorDash partnership, he said. The company now has about 420 restaurants across three marketplaces, including all of its company-operated locations, he said.
Alongside this expansion, it also rolled out a delivery menu that has a bigger emphasis on family meals and combos to drive more profitable sales on these platforms, he said. For customers that order on its website or mobile app, they can access a full menu and have delivery fees attached to that, he said. The company will pass along the costs of delivery to the customer to improve margin costs, but hasn’t seen much pushback from consumers who realize they are paying for convenience, he said.
El Pollo Loco also plans to add Grubhub to its list of delivery providers, which is expected to launch in December, Acoca said. The company will be expanding its order capabilities by adding Facebook Messenger, Apple Business Chat and Amazon’s Alexa in early November, he said.
Virtual restaurants are an innovative avenue the company is pursuing to drive delivery sales across its portfolio,CEO Andrew Wiederhorn told investors during a November earnings call. Through a partnership with Uber Eats, it has launched more than a dozen virtual Hurricane restaurants to date, meaning consumers can get Hurricane delivery in a market where there is no physical restaurant, he said.
The company transforms certain Fatburger and Buffalo’s Express kitchens into virtual kitchens for Hurricane’s, which requires little investment and doesn’t impact operational complexity since Hurricane’s menu is similar to Buffalo’s Express. Early results from these virtual kitchens have been strong, and it is expanding these to 85 locations by the end of the year, he said.
Fiesta Restaurant Group
Delivery through DoorDash is available across Pollo Tropical’s entire footprint, but the channel is still in its early stages, representing just 2.3% of total sales in September, CEO and president Rich Stockinger said during the restaurant’s Q3 earnings call in November. The company believes delivery mix could eventually hit 10% to 15% of sales. Pollo Tropical has also hiked its prices on DoorDash to offset hefty delivery costs, but hasn’t experienced guest complaints as a result, he said.
Pollo Tropical has also launched rapid pickup at 36 store locations. The program has performed well, and the brand will roll out the service to all restaurants by Q1 2020, he said.
Taco Cabana and Pollo Tropical’s exclusive partnerships with DoorDash end in February, and Fiesta has begun discussions with other third-party delivery providers to expand its market reach.
“We believe in making our food available on a variety of marketplace platforms is important to gaining share within the nascent market for delivery,” Stockinger said.
The company is optimistic about Pollo Tropical’s catering capabilities, Stockinger said. It has invested in the brand by adding additional sales people, catering and operational units and delivery vehicles to optimize the service.
Taco Cabana now features a low price catering menu that went online at the end of September and is available at all restaurants. The service will launch on ezCater this month. Fiesta has also built out Taco Cabana’s catering infrastructure to improve the offering, and delivery drove 1.4% of total sales in September, Stockinger said. Like Pollo Tropical, Taco Cabana also raised its delivery prices on DoorDash.
In Q3, online catering and delivery comprised 4.4% of Pollo Tropical’s total sales and 3.6% of Taco Cabana’s total sales, compared to 1.7% and 1.4%, respectively, in Q3 2018, CFO Dirk Montgomery said.
Habit Burger and Grill
The fast casual chain currently works with DoorDash and Postmates, but is testing Uber Eats and expects to roll out that partnership systemwide by the end of the year, President and CEO Russell Bendel told investors during an October earnings call. The company believes adding a third partner will allow it to reach additional customers that are not using the other two platforms, he said.
"We were very pleased with the trajectory of the delivery channel and it has quickly grown to be a meaningful part of our business," Bendel said.
Online ordering and mobile orders are growing significantly and same-store sales rose 25.8% for this channel during the third quarter.
Jack in the Box
The company continues to see growth with delivery and over 90% of its units are now covered by delivery providers, CFO and EVP Lance Tucker told investors during a November earnings call. Additional delivery providers will come online as providers grow unit counts with more Jack in the Boxes available on these platforms than previously, he said.
Delivery is expected to be worth $4 billion and make up 4% of global sales, CEO Steve Easterbrook told investors during an October earnings call. Comparatively, delivery made up $1 billion three years ago. Customers are making 10 McDelivery orders per second on average globally, and delivery is available at about 23,000 restaurants around the world.
In the U.S., average McDelivery orders increased where the chain added DoorDash as a delivery partner. Multiple delivery partners appeal to new customers, especially those that are loyal to a specific app, or are in specific geographies where existing partners were not available, he said. The company began its partnership with DoorDash in Houston this summer and added Grubhub/Seamless in the New York City area in September.
“Delivery remains a big frontier for our business and we still have a long way to go even with our existing customers to encourage awareness and trial,” he said.
The company’s McDelivery Night In, which occurred in September, had doubled the participants from last year and generated a sales lift of over 25% globally, with a halo effect the following day driving the most ever delivery orders for the company on a single day, he said.
Noodles & Company
Digital sales increased 47% during the third quarter and off-premise increased 490 basis points to 54% of sales, year-over-year, CEO Dave Boennighausen told investors during a November earnings call.
Delivery, which was rolled out during Q4 2019, made up 7.6% of sales during Q3 2019, CFO Ken Kuick told investors. In order to lessen the impact of delivery on margins, the company implemented a 10% pricing premium systemwide in late October.
The company is also testing direct delivery, in which the delivery is completed by a third-party, but ordered through Noodles & Company’s native digital channels, Kuick said.
Catering is currently less than 2% of sales, but the company believes there is significant upside in this line of business and expects it to be a significant driver in 2020, Boennighausen said.
The pizza chain continues to expand its partnerships with third-party aggregators to better address the driver shortage, which is impacting restaurant profitability, CEO Rob Lynch told investors during a November earnings call. The company finalized a relationship with Uber Eats in October following its existing partnerships with DoorDash and Postmates.
The company has also been integrating its systems so that orders that come through seamlessly from third-party aggregators and show up as a DoorDash, Postmates or Uber Eats order, Lynch said.
“We’ve found that for the most part their drives show up in a timely manner and deliver our products in a way that’s consistent with how we would hope our drivers deliver our products,” he said.
Third-party delivery orders are still a small part of it overall sales, but the company believes these partnerships will help it with customer acquisition and productivity and throughput during high peak periods since they can offer more drivers and take more orders, Lynch said.
Potbelly launched its nationwide partnership with Grubhub in October, a few months after it rolled out its partnership with DoorDash. Grubhub will provide branded app development, loyalty and customer relationship management, Seth Priebatsch, Grubhub head of enterprise restaurants, said in a press release.
During the company’s Q3 earnings call, CEO Alan Johnson said off-premise and digital sales — including delivery, catering and pickup — represent 21.6% of quarterly sales, an all-time high for the chain. Last week, the sandwich chain entered a new nationwide partnership with Grubhub to continue to grow its delivery business.
Johnson said that this period marks 15 consecutive quarters of positive comp growth for off-premise. Delivery is currently offered in every Potbelly store, he added.
The company expects higher third-party delivery sales after it recently added a new service provider to the majority of its system, Chief Financial Officer Lynn Schweinfurth told investors during a November earnings call. The company continues to highlight outsourced delivery for orders placed by guests directly with Red Robin, allowing the restaurant to control the ordering experience, retain order and guest history and leverage its royalty program and lower costs associated with third-party marketplaces, she said.
“I think third-party delivery is as much defensive as it is offensive because you want to make sure that people are always considering your brand when they’re looking at a place to do business with,” CEO Paul Murphy said.
Off-premise made up over 13.2% of sales during the quarter, a 37.3% increase year-over-year, and delivery currently represents 5.4% of the company’s food and beverage sales, Schweinfurth said.
Catering delivered 74% year-over-year growth during the third quarter, and the company’s sales team is focused on driving business-to-business national accounts, supporting recurring catering occasion and refining the company's core catering menu, which includes the expansion of its carbonated beverage brand, Schweinfurth said.
The company also plans to add labor hours to better support its fast-growing off-premise channel, Chief Operating Officer Guy Constant said.
Delivery is now available across nearly all of Shake Shack’s company-operated stores, CEO Randy Garutti told investors during a November earnings call. The company formalized a partnership with Grubhub during the summer.
With Grubhub’s platform integrated into the restaurant’s point-of-sale system, the company will have real-time communication with kitchen demand, drive availability and pickup time. This system will help reduce guest wait time, which will improve the quality of the food as well, he said. Other platforms have struggled with these challenges, and the company chose to work only with Grubhub because it felt that its system did the best job at addressing the issues of food quality and guest experience, Garutti said.
Its Q3 numbers were mildly impacted by the transition to Grubhub and the company expects an impact during Q4 and early into 2020. The company is removing direct POS integration with DoorDash, Postmates and Caviar, and expects an impact on delivery revenue, especially in areas where Grubhub is not a market leader, Garutti said. Shake Shack believes these impacts will be only a short- to mid-term revenue risk, however, Garutti said.
It plans to increase marketing of its Grubhub partnership and doesn’t expect a difficult time in New York where Grubhub is a market leader, but in Los Angeles, where Grubhub is not a big market leader, it will have to work harder, he said.
The coffee chain expanded Starbucks Delivers, which initially launched as a pilot program with Uber Eats in 2018, to five additional cities in October. New markets include Atlanta, Denver, Phoenix, Philadelphia, New Jersey and further expanding into the New York Metro as well, according to a press release. The program is now available in 16 U.S. markets and is expected to reach national availability in early 2020.
Delivery and digital sales are up 325% year-over-year, Laura Titas, Wendy’s chief digital experience officer, told investors during the company’s Investor Day in October. The company expects delivery and digital to make up 10% of U.S. sales by 2024.
The fast food chain has expanded its DoorDash delivery footprint to 80% of its stores and is achieving delivery times of less than 30 minutes, 50% to 60% higher check sizes than a typical order and delivery ratings of 4.5 stars, she said.
The company is working on POS integration so delivery orders go directly to the restaurant just like its mobile orders, saving three to five minutes on delivery times. This also gives the company direct access to sales and operational reporting for stores to use to monitor and get better, she said.
Wendy’s will launch in-app delivery ordering by the end of the year, allowing the chain to own the end-to-end experience, she said. With DoorDash, the customers are DoorDash customers making it more difficult to fix any problems or keep track of customers, while an in-app experience would create one-to-one engagement with customers. This will allow Wendy’s customer care to fix a problem with more information.
It is also expanding its delivery partnerships and plans to add Uber Eats and Grubhub as a platform to accelerate growth next year.
Digital sales, which includes delivery, are up 1,000 basis points year-over-year and accounts for 36% of domestic sales during the third quarter, President and CEO Charles Morrison told investors during an October earnings call. Digital orders typically carry a $5 higher average ticket, Morrison said. The company thinks it can drive these sales without discounts or incentives, he said.
Wingstop, which partners with DoorDash, started rolling out delivery in late 2018, reaching 75% of its domestic system by the end of the third quarter, Morrison said. In October, the company reached its 2019 goal of having delivery within 80% of its system, and the company now expects the offering to reach 90% of its system by the end of the year, he said.
"This will put us in great position for 2020, where we can leverage our national TV advertising to promote the delivery channel for the first time as a brand," Morrison said.
Even after full implementation, Morrison doesn't expect delivery to slow. In its original test markets that are now in their second year of operation, the company has seen continued organic growth even though it hasn’t done any advertising, he said.
The company doesn't have any plans to add another delivery partner and remains satisfied with its relationship with DoorDash, he said.
Delivery rollouts continued across the company’s brand, reaching 2,700 KFCs and 3,700 offering click and collect via Grubhub, SVP and Corporate Controller David Gibbs told investors during an October earnings call. The company officially launched online ordering on Oct. 13 alongside its introduction of Kentucky Fried Wings and its Rudy-inspired advertising, he said.
The company has also expanded its test with Pizza Hut and is active in 700 units. The company leverages listings on Grubhub and uses self-delivery to fulfill orders. Delivery is also available at 4,800 Taco Bells in the U.S. and mobile and online ordering remain a top priority. The QSR now has over 14 million registered users. Click-and-collect is also now available nationwide on its website and app.