Why Some Casual Dining Chains Are Testing Delivery-Only Restaurants

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Restaurant chains like Outback Steakhouse and Red Robin Gourmet Burgers are turning some locations into “restaurant pods,” or kitchens dedicated to create orders only for delivery.

Red Robin’s vice president of innovation, Jason Rusk, cites increasing labor costs as the main reason behind the move. The casual dining chain currently has one location in Chicago’s North Michigan Avenue that has been converted into a commissary to test out the delivery-only facility concept.

“Labor costs across the country are going up, and that’s clearly putting pressure on all restaurants… Ideally, we’d like to go into low-rent warehouse spaces with our delivery concept,” Rusk told “The New York Post.”

Bloomin’ Brands, owner of Outback Steakhouse and Carrabba’s Italian Grill, opened its second delivery-only restaurant in Florida this month offering a combined menu of the two restaurant concepts. The company plans to open three more delivery-only restaurants in the same state by early 2018.

According to “The Post,” casual dining chains have been hit especially hard this year, with hundreds of eateries shutting down, “including up to 135 Applebee’s Grill and Bar, 16 Papa Murphy’s, 30 Pollo Tropical and 40 Joe’s Crab Shack eateries, to name a few.”

Some, like Zane Tankel, CEO of Apple Metro, think these delivery-only restaurants are a “sign of desperation,” as reported by “The Post.”

Do you think this move defeats the concept of casual dining or are these delivery-only kitchens helping the segment survive?

Read more at “The New York Post.”