Operations

Dickey's gives self-delivery a try

Dickey’s Barbecue Pit isn’t the only restaurant chain that would prefer to deliver orders itself instead of relying on third-party services. Now it’s testing the feasibility of adding an in-house option at any of its 550 locations that field at least six delivery orders per day.

The fast-casual chain is currently offering self-delivery at company stores and about 25 franchised units. All continue to provide delivery through outside services such as Grubhub and DoorDash as well, but the do-it-yourself version already accounts for 18% of Dickey’s delivery sales.

The test stores enjoy profits as much as 10% higher per order when they self-deliver, says CEO Laura Rea Dickey.

Company stores do not charge customers a fee for a delivered order. Franchised restaurants have the discretion of adding a charge. No minimum delivery order is set, and the hours aren’t limited.

Dickey’s is not alone in trying a hybrid system, in which delivery orders placed through the brand’s proprietary channels are transported by employees and ones submitted through third parties’ apps are handled by those services. Outback Steakhouse parent Bloomin’ Brands, for instance, is testing that model at 240 restaurants, CEO Liz Smith revealed last week. Red Robin is giving it a trial at a delivery-only experimental unit in downtown Chicago.

The stumbling blocks are shifting more orders to the brands’ apps or online ordering functions, along with the logistical costs—things like hiring drivers and providing vehicles.

“The leap for us was thankfully short,” says Dickey. She says the chain had an advantage because of its sizable catering business. “We were already set up with vans and vehicles and drivers, and packaging for off-premise. It was a difference in degree instead of kind.”

A typical delivery order is for four to six sandwiches, she says.

Dickey suggests that even if gas and additional hours add some expense, the hit will no doubt be more moderate than the 18% to 28% commission third parties levy per order. “Allocating that 18% in a different way, even using half of it, we’re still considerably more profitable,” she says.

The biggest advantage of self-delivery isn’t the financial impact, but the guest experience it affords, says Dickey. “Being able to control the quality and consistency, from our smoker to the guest’s front door, is enormous,” she says.

But the economics are powerful, she adds. The key is finding the point of profitability—where the check count and average order size make the endeavor worthwhile. Technology now in place at the chain enabled Dickey’s to work up to that point for stores.

“Once you cover your costs, delivery can be very profitable,” Dickey says.

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