For now, though, traffic growth remains a top concern for restaurants. Same-store traffic declined 3.1 percent in October, which represented a 0.2 percentage point drop from September’s result. October’s weak traffic has become a norm, TDn2K said. Comparable transactions have averaged negative 3.2 percent for the seven months since the beginning of the second quarter.
And although the net growth in the number of chain restaurant locations slowed in recent years (following the 2008 boom), expansion continued to be positive and is compounded year-over-year.
“The result is a highly saturated industry in which restaurant visits continue to get diluted among many possible options for diners. In this environment, same-store traffic growth continues to be a real challenge for operators,” TDn2K said.
What we’re looking at then is positive comparable sales driven entirely by off-premises growth. TDn2K called it “one of the most persistent and important shifts that we are tracking.”
The new arena is declining dine-in sales offset by strong to-go business and other forms of off-premises sales. But what is the cap? Is there even one?
According to the National Restaurant Association’s “Harnessing Technology to Drive Off-Premises Sales” report, released in October, about 60 percent of restaurant occasions are now off-premises across all forms, including drive-thru, takeout, and delivery.
Other points included:
- 43 percent of delivery users place orders via restaurant apps while only 18 percent of operators offer mobile ordering via their own app.
- 78 percent of restaurant operators consider off-premises programs a strategic priority.
- 74 percent of companies are investing in off-premises programs but none of the top five investments include customer-facing technology.
There’s proof this push isn’t slowing, too, at least not anytime soon. So, driving results off the movement might come down to aggregator leverage, marketing, and finding ways to streamline operations to make these channels as cost-effective and margin friendly as possible.
The National Restaurant Association found that 92 percent of consumers use drive thru at least once a month. Thirty-four percent said they deploy delivery more than a year ago. Close to 80 percent use delivery (53 percent third party) at least once a month.
And yet the door remains just cracked for the most part. Only 22 percent of consumers tried kiosks last year and 11 percent voice-assistant ordering.
If available, 69 percent said they would use vehicles with built-in heating trays to keep food warm and 41 percent would give autonomous delivery a shot, like drones and self-driving cars.
Forty-four percent of restaurant operators who offer voice ordering and 50 percent who offer location intelligence based on their position said it had a large, positive impact on their business.
In sum, new technology is going to play a critical role in growing off-premises revenue. And that’s becoming a critical lever in a world where guest traffic and dine-in business might not return to past levels.