Off-premise initiatives

Note from the editor

The novel coronavirus pandemic has proven that off-premise is a vital part of the restaurant industry.

Those that already offered takeout, delivery and drive-thru were able to continue operations even when their dining rooms were forced to close. While 86% of franchisees surveyed by TD Bank said they offered delivery and online ordering pre-pandemic, 72% implemented enhancements across these channels during the pandemic.  

Others had to quickly adapt. Full-service chains Fogo de Chao and STK developed off-premise channels that they say can help capture the in-store restaurant experience. STK adapted its menu to provide more takeout- and delivery-friendly items, and also now offers guests access to STK Radio for them to listen to music they would hear in the dining room. 

But even before the pandemic hit, restaurants were undergoing a transformation due to the growth of online ordering, which increased 23% annually from 2013 to 2018. Mobile ordering has resulted in fewer people dining in and chains have responded by designating areas for takeout and delivery, reducing the overall size of their restaurants and expanding into ghost kitchens. Firehouse Subs and Famous Dave’s, for example, built smaller restaurants to accommodate more takeout orders, while Moe’s Southwest Grill opened an all-digital, kiosk-only location in early 2020. 

This report explores key aspects of the off-premise segment, including:

  • How the pandemic fueled drive-thru design innovations
  • How the pandemic accelerated the U.S. ghost kitchen market
  • What full-service chains like Fogo de Chao and STK did to pivot to off-premise
  • Why one independent restaurant chose to renovate during the pandemic 
  • Technologies chains are adopting to improve curbside pickup
  • Whether the ghost kitchen segment will define the restaurant industry’s future
  • McDonald's loyalty program and drive-thru innovations
  • The debate over third-party versus direct delivery

These are just a few of the many trends shaping the off-premise segment. We hope you enjoy this deep dive into today’s landscape.

 
Julie Littman Reporter

How the pandemic accelerated the US ghost kitchen market '5 years in 3 months'

The COVID-19 crisis has restaurants 'running to catch up' to delivery demand, but experts now see potential for permanent changes to business models as dark kitchens gain steam.

• Published Oct. 5, 2020

Pandemic revs up drive-thru design innovations

With drive-thru traffic increasing in the double-digits over the last two quarters, QSRs like Arby's, McDonald's, Burger King and Taco Bell have developed designs that better streamline the channel.

• Published Nov. 19, 2020

How Fogo de Chao, STK balance off-premise with experience

The challenge for both brands was developing solutions that would be robust enough to withstand the pandemic without compromising the reason diners visit them in the first place: experience.

• Published Jan. 19, 2021

From full-service to grocery hybrid: Why 1 restaurant chose to renovate during the pandemic

Cotton Blues Kitchen & Marketplace used the business slowdown to recreate the dining experience with a market, grab-and-go items and a smaller dine-in menu.

• Published Aug. 12, 2020

How chains are automating the curbside experience

Customers calling in for their food upon arrival have created logistical headaches for many restaurants new to curbside, and they are turning to geofencing and integrated alert systems.

• Published Sept. 23, 2020

Will ghost kitchens define the restaurant industry's future?

While investor interest booms and sales have the potential to outpace traditional models, questions linger about how much this emerging market could disrupt business in the long term.

• Published Nov. 9, 2020

McDonald's new loyalty program will optimize digital, drive-thru opportunity

The chain will begin piloting the program, which offers personalized orders and deals across all digital touchpoints, at select Phoenix, Arizona, restaurants prior to a nationwide launch next year.

• Published Nov. 9, 2020

Third-party vs. direct delivery: Debate reaches boiling point amid coronavirus

There's no restaurant roadmap to survive dining room closures. But one thing is certain: pick the wrong off-premise game plan when the stakes are this high, and it could gut your bottom line.

• Published May 7, 2020

How restaurants are profiting from off-premise initiatives

Restaurant takeout orders skyrocketed during the pandemic, with third-party delivery comprising over half of all orders. By 2022 the use of third-party delivery will increase to 70%, making a multi-channel approach to off-premise key for restaurateurs.

included in this trendline
  • Chicago hybrid restaurant offers a side of humor with 'social distance goods'
  • Meal kits could offer untapped revenue stream for restaurants
  • A new kind of ghost restaurant is brewing
Our Trendlines go deep on the biggest trends. These special reports, produced by our team of award-winning journalists, help business leaders understand how their industries are changing.
Davide Savenije Editor-in-Chief at Industry Dive.