The statistics are staggering: 86% of consumers are using off-premise services at least monthly. And a third are using it more than they did a year ago, said Melissa Wilson, principal with Technomic.
Food delivery, in particular, is projected to grow in the double digits—12% per year over the next five years, Wilson told an audience of restaurant operators at the Restaurant Leadership Conference this week in Phoenix.
While some operators fear sales cannibalization, the data shows that, in most cases, the concern doesn’t bear out. About 60% of operators surveyed by Technomic say that offering delivery has generated incremental sales. Just 11% felt that it impacted dine-in business, and only 7% said that it impacted takeout sales. And with 1 in 4 consumers saying they spend more on off-premise orders, there’s opportunity for increased check averages.
Generational shifts are one major contributor to consumers’ growing desire for delivery. By 2026, 80% of millennials will be parents, said Wilson. Combine that, she said, with nearly half of consumers preferring to eat at home. The result is incremental sales growth for operators who can provide the optimal food delivery experience.
In order to be competitive in the off-premise market—going against restaurant brands as well as other foodservice providers like supermarkets—operators need to address who they are going after and how, said Wilson. “A lot of brands need to re-evaluate who their heavy users are,” she said. Third-party delivery is bringing in guests to Red Robin that Carin Stutz, EVP and COO, believes the brand wouldn’t have seen otherwise.
But from there, said operators, the challenge is driving brand loyalty. “The elephant in the room is that, with third party, we don’t own that guest,” said Stutz. Figuring out that piece of the puzzle—how to partner with third parties when it comes to brand loyalty programs—is one of the top needs today, said Jim Thompson, VP of operations for Chicken Salad Chick.