It's a rarity to see a large restaurant group decide not to chose between proprietary and third-party delivery, but instead happily opt for both in efforts to get all of the customers it can.
— Danni Santana
At its annual investor day, Monday, incoming CEO and current Chief Financial Officer David Deno said that 80 percent of Outback Steakhouse’s locations now offer delivery directly to customers. The remaining stores use third party delivery services: Uber Eats, GrubHub, Postmates, and DoorDash.
Off-premise orders now account for 12 percent of Outback’s total sales, according to the company. However, contrary to recent trends, Outback’s average ticket per customer remains higher in-store orders than those placed for off-premise consumption.
Diners spend an average of $27 on takeout, compared to $42 for delivery, and $54 in-restaurant, according to Deno. Yet, Bloomin’ Brands remains committed to the strategy due to shifting demographic trends. Industry market research firm NPD Group says that while 46 percent of baby boomers order food for delivery less than once a month, 29 percent of millennials do so at least once a week.
“Delivery offers an incremental sales opportunity,” said Deno. “And make no mistake about it, we are making money on this today.”
Bloomin’ Brands predicts off-premise will soon account for 25 percent of sales, or upwards of $500 million, at both Outback and Carraba’s Italian Grill, the two chains the restaurant group has invested funds into proprietary delivery for so far. Meanwhile, Bonefish Grill, another of the company’s subsidiaries, has also begun testing third-party delivery with DoorDash.
New Store Remodels Make Delivery Easier
Outback is testing a new interior remodel program in 35 of its locations to better capitalize on its delivery and takeout business, Deno said. About 300 stores will be upgraded this year. The chain’s last interior store remodel, in 2013, led to an immediate 3 percent sales lift.
“Most companies will announce a third-party deal and move on, but we wanted to take a step back and really capitalize on the opportunity,” said Deno, who helped launch delivery at Pizza Hut back in the 1990s. “Additionally, 74 percent of our customers prefer direct delivery over a third-party.”
For the remaining 26 percent of diners that want to order via third-party food delivery apps, Outback is offering that too.
“Different customers use delivery in different ways,” Deno concluded. “Those are customers we need to reach as well.”
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