When P.F. Chang’s decided to try doing its own deliveries, it viewed the move as a way to make the service more cost-effective.
But as the test progressed, the company discovered customers liked it—so much so that they were actually ordering more food, more often. What began as a cost-control strategy has become a revenue-driving exercise for the 200-unit Asian chain, said CEO Damola Adamolekun, making it one of the few non-pizza concepts to embrace the DIY delivery route. Currently, 80 Chang's units are offering self-delivery, and Adamolekun is determined to see that number grow.
“The experience was better for the people who were ordering,” he said. They liked to see an employee arrive in a P.F. Chang’s uniform and the ability to ask a question about their meal or get a few extra sauce packets.
When Adamolekun became CEO in July 2020, the self-delivery test was underway at just one restaurant, and it was winding down. That initial location, in McAllen, Texas, has since gone from being a mediocre performer to one of the chain’s top restaurants thanks to self-delivery.
“It shows up in the top five, top 10 all the time now,” Adamolekun said.
Damola Adamolekun became P.F. Chang's CEO in July 2020. / Photograph courtesy of P.F. Chang's
Chang’s still works with third-party delivery providers as well, and uses software to dispatch orders in restaurants where it has both. All staffers on its off-premise teams are certified to drive, and restaurants that do a lot of delivery have dedicated drivers.
Employees tend to be eager to get licensed for delivery, Adamolekun said, noting that bartenders have even stepped up to do it.
Under the chain’s team-based staffing strategy, “tips are shared,” he said. “You find that people want to pitch in when you have that ethos.”
The cost of self-delivery varies depending on local wage rates, but it's “roughly in the ballpark” of what it costs to outsource the work, he said. These days, providers like DoorDash and Uber Eats charge somewhere between 15% to 30% per order.
Given all that, the chain plans to continue pursuing the first-party approach.
“We like it, we think it’s something the guest likes, and that’s our focus, is building a great experience for the guest,” Adamolekun said.
A number of chains have tried doing their own delivery, with uneven results. Burger King tried it starting in 2011 but discontinued it. Olive Garden has tested it, but remains content to only deliver orders of more than $50 placed a day in advance. Panera Bread began offering it in 2016 as a way to control costs, but phased it out earlier this year after it began working with third-party providers.
But Portillo’s added it last year, citing customer experience as a key factor, and Chick-fil-A also plans to fulfill deliveries at its new Little Blue Menu delivery-only kitchen.