Tightfisted consumers increasingly are eating at home or picking up ready-to-eat meals from their local grocery stores. But savvy restaurateurs can lure them back during these tough economic times by offering carryout, curbside or delivery service.
“While we have advocated that restaurants develop some combination of these services for some time, we now believe they are a ‘must have,’” says Maria Caranfa, director of Mintel Menu Insights, a company that tracks industry trends.
Those three service options cater to consumers seeking convenience and compete with supermarkets offering competitive, ready-to-eat fare, she says.
“But it’s also about the money,” Caranfa continues. “Eating at home allows consumers to avoid paying a 15 percent gratuity and to avoid the much higher cost of restaurant beverages. For restaurants that know they are losing customers to home meals, takeout, curbside and delivery gives them an opportunity to recoup part of that revenue.”
Applebee’s and Outback were among the first to notice that consumers crave convenience, and led the way with their curbside initiatives back in 2002. Since then others have followed suit. Last year, for instance, after purchasing Applebee’s, IHOP started offering curbside delivery.
When gas prices spiked to a whopping $4 a gallon last year, some restaurateurs noticed customers were cutting back on their driving, so they beefed up their delivery options. The Cheesecake Factory and BJ’s Restaurants both tested delivery last year, and fine-dining operations and independents are also getting into the act.
Like many restaurants, The Cheesecake Factory always is looking for new ways to satisfy its guests, deliver a consistently high-quality dining experience and increase sales, says chief marketing officer Mark Mears. Adding delivery was a natural extension of the chain’s carryout menu and Curbside-To-Go option, which allows customers to call in orders and have then delivered to their cars.
“We initially tested the concept of delivery among a few, well-respected third-party delivery services to address one of our key issues—whether or not we could confidently deliver a consistently high-quality Cheesecake Factory dining experience to our guests at their home or business,” Mears says. “The other issue we tested was the price sensitivity of adding a delivery charge [or] commission to the menu prices as a result of having to work through a third-party delivery company.”
Satisfied that people were willing to pay a bit more for the convenience, delivery was rolled out to half of the chain’s 145 full-service restaurants. “As competent new delivery companies come on board in new markets, we have plans to extend our delivery service to guests in those areas over time,” Mears says.
“Finding delivery companies that measure up to Cheesecake’s standards has limited the rollout, however. As a result of the relative infancy of this industry, we have found some delivery companies are more sophisticated, better capitalized and a bit more professionally operated than others, which tends to correlate in many cases to our sales performance,” Mears says. “We have also learned that delivery within a more urban setting has proven to be more successful than suburban areas.”
In addition to convenient delivery options and in an effort to thwart competition by grocery stores, Mintel’s Caranfa says restaurant operators should work with local grocery stores to create a mini restaurant within the store. The concept simply could mean a “space” set aside in the store for restaurant-brand products, but could be extended to a restaurant-branded area in a store that is staffed by the grocery store.
While examples are hard to come by, such an idea isn’t that farfetched. Costco Wholesale Corp. has seen tremendous success with its simple menu food court, and retailers such as Woolworth’s operated successful in-store lunch counters. Grocery stores are already adding in-store restaurants. Depending on the size and location, Whole Food Corp.’s prepared foods departments can include a deli, an ethnic restaurant, burger joint, neighborhood diner, Parisian cafe, pizza joint, BBQ shack, sushi or a seafood bar, among other options. In Wooster, Ohio, 11 of Buehler’s 13 grocery stores have full-service restaurants with chefs.
