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Operations

Talk of the industry this week: On-premise dining

Or at least that was a major theme at the ICR Conference, where three dozen chains aired their strategies and financial results.
punchbowl social
Photograph courtesy of Punch Bowl Social

Hold on a minute, all you delivery converts. Much of the talk at this week’s ICR Conference focused on a swing in the opposite direction, the trend toward experiential on-premise dining. 

The event, a three-day dive into the finances and strategies of 36 restaurant chains in total, provided considerable evidence that not every operation sees partnerships with third-party services as the next best thing to uncovering a diamond mine in your parking lot. The skeptics didn’t dispute that consumers want to eat restaurant meals at home or in their offices. They just don’t see the now-standard approach of working with a service as the best way to exploit the opportunity, especially when a concept is built on service and entertainment as much as food.

Fogo de Chao, for instance, prefers to do its own delivery, a considerable undertaking for a 43-unit chain that carves meat tableside off giant skewers. It’s hard to pack that experience into a box, but the chain can’t ignore a very real shift in consumer behavior, says CEO Barry McGowan. 

At the very least, it’s not about to entrust the brand to a third party. Employees transport the food with an assist from Uber—not Uber Eats, but the car-calling core business, which is how staffer and food get to customers’ homes. The arrangement also allows the chain to make a pitch to the off-premise customer. The team member can deliver an invitation to visit the restaurants, along with a certificate entitling the bearer to a break on the price of Fogo’s South American wines. 

The Brazilian concept has an order minimum of $200 and a requirement that the order be placed two hours in advance. The average order is $600, according to McGowan.

It’s what most operators know as catering, but what Olive Garden calls big-order delivery. And it’s not about to try the small-order variety, declared Rick Cardenas, CFO of parent company Darden Restaurants. “Let’s be clear: We already deliver at Olive Garden,” he said. But an order has to total at least $75 and must be placed by 5 p.m. the day beforehand. 

Neither requirement is a problem, Cardenas attested, noting that the average order is $350. “We’d rather do that sort of delivery than a $12 order,” he said. 

Others noted that they’re not blind to the opportunity afforded by delivery, but they just can’t reconcile it with their immersion approach to pleasing guests. Said Cheryl Henry, CEO of Ruth’s Chris Steak House’s parent: “It is not going to be as meaningful for this high-touch brand as it is for others.”

The brand’s alternative focus is on selling homestyle sides as complements to home-cooked meals. 

A renewed focus on dine-in business was also reflected in the repeated mentions of new customer draws. 

Punch Bowl Social described a new proprietary dart attraction that carries a fee of $25 an hour, along with a novel putting game and a series of classes focused on everything from cooking to leather-working a collar for your cat—“anything you can do with a glass of wine in your hand,” said CEO Robert Thompson. 

He also revealed that the grub-and-games concept is installing a podcast recording booth where podcast-loving millennials can record their own segments. The amenity can also be used by corporate customers that want to commemorate a gathering with a podcast.

There’s no mystery as to why the 17-unit chain is investing in those new attractions: “Eatertainment is taking share from casual dining. That’s been true for the last three years,” Thompson said. 

Ray Blanchette, CEO of TGI Fridays, revealed that his charge, a chain that started as a bar concept, is working on a reinvention of that signature feature to fuel its turnaround.

Barcelona Wine Bar has already revamped its bars in part to ensure bartenders make eye contact with patrons. “We’re selling an experience,” said CEO Adam Halberg. “There are a lot of people who come to Barcelona who seek out new experiences.”

And the chain is not alone in seeking to give them that on-premise wow. 

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