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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 in March and April. Restaurants like 101 North Eatery & Bar in California turned to curbside pickup, delivery and cocktail kits, while All Together Now in Chicago created a pickup window, family dinners and tweaked its menu for delivery. 

But even before the pandemic hit, restaurants were already 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 plans to open all-digital, kiosk-only locations. 

Streamlining operations to accommodate more carryout orders has been a main strategy as this segment grows at a faster pace than delivery. Domino’s proved this in 2019 when carryout orders represented 2.5 times the number of transactions compared to delivery. Carryout is especially popular because it doesn't come with third-party commissions and customer don't have to pay additional fees. 

But delivery will only continue to grow and third-party delivery comprises over half of all delivery. This is expected to increase to 70% by 2022, proving that a multi-channel approach to off-premise will be key for restaurateurs. 

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

  • How independent operators adjusted to off-premise during the pandemic
  • Why restaurants are missing out by not offering alcohol delivery
  • How meal kits are an untapped revenue stream
  • Full-service restaurant strategies to make off-premise work
  • What restaurants are doing to make delivery work for them
  • How third-party platforms are creating their own ghost restaurants
  • Whether a hybrid delivery model is an effective strategy

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

Curbside service and cocktails: How a full-service restaurant is staying open during coronavirus

Southern California restaurant 101 North has turned to curbside pickup, delivery, cocktail kits and selling items from its kitchen to maintain revenue while its dining room is closed.

Chicago hybrid restaurant offers a side of humor with 'social distance goods'

All Together Now altered its operations to provide a variety of pandemic provisions, including nightly dinners, small bites and its popular wine and cheese pairings for delivery and pickup.

How 6 full-service brands make off-premise work

While Chuy’s and Macaroni Grill have honed in on their third-party delivery partnerships, Olive Garden is doubling down on its independent off-premise strategy.

Delivery profit is elusive. Are hybrid models the answer?

Restaurant execs are challenging the idea that standard third-party partnerships are key to survival in today’s market, but even non-traditional off-premise systems come with obstacles.

Meal kits could offer untapped revenue stream for restaurants

This off-premise segment could help restaurants offer a new option to diners alongside delivery and takeout, but very few operators have jumped into the ready-to-cook segment.

Alcohol pairs well with food delivery, but restaurants missing out

While more consumers are ordering meals for delivery, alcohol is not yet widely available and could be the next big growth area, Technomic says at the NRA Show.

How restaurants are taking control of delivery in 2020

With doubts swirling over delivery's long-term profitability, this year will be marked by restaurants renegotiating commission rates, developing branded online ordering and adding virtual kitchen

A new kind of ghost restaurant is brewing

In recent months, Uber Eats and Grubhub have leveraged Rachael Ray and Bon Appetit's star power to grow their virtual kitchen footprints. But will these concepts last beyond 15 minute of fame?

Restaurants are only getting smaller, and that's by design

With fewer customers eating at restaurants, operators are eyeing more compact locations with dedicated areas for takeout orders.

Are off-premise channels a silver bullet for the casual dining segment?

Restaurants have experienced declining sales for the past decade, but delivery, catering and carryout are yielding positive results for major chains.