Chipotle, Applebee's, and Other Chains Turn to Delivery to Survive

Chipotle, Applebee's, and Other Chains Turn to Delivery to Survive

Delivery is slowly becoming a customer expectation. With that in mind, quick-serve and fast casual chains are jumping on the delivery bandwagon.

Earlier this week, we reported that Panera rolled out national delivery and made the conscious decision to not partner with a third-party to keep more of the profits made from delivery. 

"We do make money with delivery, but a lot of the restaurants that are using third parties, they don't make that much more," said Blaine Hurst, Panera CEO to "Business Insider." "What it is, is they don't believe they have a choice."

Although the third-party services have made it easier for brands to offer delivery, they cut into profits and the brand loses some of the control of these orders. Ultimately, it's up to the third-party's delivery driver to get the food and bring it to the guest in the estimated time frame. So the service aspect is dependent on the delivery provider, not the restaurant. 

UberEats, for example, takes a 30 percent cut, plus the platform also collects a $4.99+ delivery fee from the customer. 

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Why Diners are Visiting These Hot Casual Dining Concepts Instead of Chili’s and Applebee’s

Why Diners are Visiting These Hot Casual Dining Concepts Instead of Chili’s and Applebee’s

You’re in luck data hungry marketers and operators, Foodable Labs decided to do a deep data dive and highlight the Top 25 Hot Casual Dining Concepts to kick-off 2018.

In the past couple of months, traditional casual dining brands, like Applebee’s and Chilli’s, have been experiencing a decline in sales due to decreased millennial foot-traffic. All the while, a new generation of upscale casual dining brands are picking up slack and gaining new customers.

So why are diners choosing to eat at these establishments versus the former casual dining staples?

These concepts have been able to forge a connection with the local communities they serve— not only through community outreach, but also through their menus.

Learn about two popular brands included in the casual dining report, which is available for download, here!

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Why Some Casual Dining Chains Are Testing Delivery-Only Restaurants

Why Some Casual Dining Chains Are Testing Delivery-Only Restaurants

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

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.

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Is Casual Dining Over?

Is Casual Dining Over?
  • What's the future for brands like Applebee's and Chili's? 

  • Are millennials killing the casual dining industry? 

On this episode of Plugged In, Paul Barron looks at millennial social restaurant visit traffic (SRVs) in casual dining, as a predictor of the decline in casual dining sales. Foodable Labs has tracked a decline in millennial SRVs across the board in traditional casual dining establishments. The new millennial consumers seem to no longer resonate with legacy brands like Applebees and Chili's. 

However, traffic is up in new age casual dining at places like Matchbox and Coopers Hawk.  All is not lost, even with expansion halted and stores closing, there is a recipe for resurrecting these legacy casual dining brands. Watch Plugged In for more!

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