According to TDn2K’s Black Box data, casual dining as a whole was lapping a negative 0.4 percent quarter. Applebee’s, as noted, was circling a 3.3 percent result—and it still outperformed the category by 115 basis points.
But arguably more notable than the comps performance is what’s unfolding in Applebee’s off-premises business.
Cywinski said, excluding Applebee’s, the category is growing at about a 15 percent rate. Applebee’s is tracking 40 percent, year-over-year, although that’s likely to slow down as it measures against similar 2018 expansion. At the close of Q1, off-premises accounted for 13 percent of total system sales and will likely exceed 20 percent of mix within the next two to three years, Cywinski said.
Currently, roughly 600 locations use a third-party call center for to-go orders. This has improved guest experience, average check, and order accuracy, he added. Guests aren’t rushed off the phone by busy workers. They’re receiving the full attention of employees instead of being one task of many for a frantic restaurant server, hostess, etc.
About 60–70 percent of Applebee’s total off-premises orders are now placed digitally or online, Cywinski said, as opposed to over the phone. That’s a significant change and lever for future sales. It helps in-store operations, prevents service bottlenecks, and shows Applebee’s exactly where the consumer is headed.
“The [casual-dining] category, among many categories, is currently experiencing a fundamental convenience-driven shift in off-premise demand, driven primarily by delivery and secondarily by to-go,” Cywinski said.
Since 2017, also per Black Box, casual-dining on-premises comp sales declined (a traffic shift seen by brands across all segments), while off-premises same-store sales grew at a double-digit rate, with delivery representing the primary engine.
This past December, to that point, TDn2K said to-go sales approached 9 percent for chain restaurants, year-over-year. To compare: to-go sales in comparable stores lifted less than 4 percent in each of the past two years. Meanwhile traffic declined 2 percent industry-wide this past quarter.
“This is true across [quick-service], fast-casual family dining and upscale dining, upscale-casual, as well as casual dining of course,” Cywinski said. “I expect this trend to continue until delivery penetration matures and stabilizes.”
Cywinski added that he expects the cost of third-party delivery to be passed along to the guest, “who will likely be willing to pay more for the convenience of delivery.”
It’s a necessity, he said, given the margin implications of third-party fees. Applebee’s ultimate objective is margin neutrality.