An increasing number of full-service restaurant chains are acting like quick-service establishments, adding takeout features to serve today's generation weaned on fast food -- consumers looking for a quick, better-than-burger meal to take home.
In recent years, takeout has grown significantly, outpacing overall restaurant growth, observers told SN. Last summer, food-service operators took notice when statistics were released. Casual, sit-down restaurant companies reported takeout was growing at a rate of 16% over the previous year, while the restaurant industry as a whole saw just 2% growth in meals served, according to the NPD Group, Port Washington, N.Y.
Casual-dining establishments compete with QSRs and supermarket food-service departments for the takeout segment. Hands down, quick-service restaurants provide the majority of takeout meals. "Ninety-two to 93% of all takeout meals come from fast-food places," said Harry Balzer, vice president with the NPD Group.
Sales volume derived from takeout remains relatively small for full-service operators, but that could change, a consultant noted.
"What's holding full-service restaurants back in carryout is the ability for their products to survive 30 to 45 minutes in travel and still be as good as they are in the restaurant," said Dennis Lombardi, executive vice-president of Technomic, a Chicago-based food-service consulting firm. "As soon as the technology and packaging and recipe formulation allows that to happen, you'll start to see accelerated growth in carryout."
If they haven't already, many full-service chains are adding takeout operations to existing stores, and opening new units with takeout features in the business plan. Sixty of the 1,400 restaurants in the Applebee's chain have just launched a test, said a spokeswoman for the concept, based in Overland Park, Kan.
Other well-known chains, including Outback Steakhouse, Chili's and Ruby Tuesday, have jumped on the takeout bandwagon.
"It's a service consumers greatly enjoy and it's a growing part of our business," said Paul Avery, Outback's president.
Still in its infancy, Outback's curbside "take-away" program debuted a few years ago in various locations and has been in place at all Outback stores in the chain for 18 months. Customers call ahead to place their order, then drive to the restaurant and follow the signs to the dedicated parking spaces reserved for takeout customers. Without leaving their cars, customers receive their food, delivered by employees who accept cash or credit cards as payment.
Inside, each restaurant has a dedicated, staffed room measuring about 200 square feet where all carryout transactions are handled, Avery said. Consumers can order anything off the regular Outback menu.
"Some things travel better than others," Avery noted.
Delivering takeout is tricky for full-service operators. Capturing feedback from consumers is one of the many challenges, Avery said. In traditional sit-down restaurants, customers don't have to leave their table to pay a compliment, or air a complaint. Takeout customers on the other hand don't have an immediate opportunity to convey their feelings.
Outback customers have found instructions, tucked inside their food packages, directing them to a survey on the company's Web site. Those who complete the surveys have been rewarded with complimentary appetizers.
"We have to continually think of different ways to get feedback on take-away," Avery said.
Takeout operators face the added challenge of order accuracy. Mistakes can be addressed easily enough in the restaurant, but not when consumers -- at home -- discover the New York strip they ordered medium rare turned out well done.
Timing is another issue.
"We don't want food sitting in the take-away room getting cold before the customer arrives, or have a customer wait five to 10 minutes in the parking lot," Avery said.
Takeout can impact dining-room sales, he acknowledged. "Cannibalization is a concern for all operators," he said. "We have to be sensitive not to transfer them to take-away. We'd prefer them to have the true Outback experience inside the restaurant."
Takeout checks are lower than dining-room tabs, since carryout customers don't order alcoholic beverages. Nevertheless, the program has enabled Outback to attract new customers, Avery said, noting full-service and takeout sales are growing for the establishment. Takeout sales accounted for 5.4% of total sales for the Tampa, Fla.-based steakhouse chain in 2001, according to Technomic.
Pizzeria Uno Chicago Bar & Grill is an old hand at takeout. For many years, the chain of 180 casual-dining restaurants has offered takeout, in addition to full-service dining in a lively and casual setting. Sales from takeout generated 10% of Uno's overall sales in 2001, Technomic research shows.
"Takeout is a big growth opportunity for restaurants like Uno's," said Heyward Whetsell, the Boston-based chain's senior vice president of marketing. "It gives us a chance to meet our guests' needs for convenience with what we believe is the best food around."
At Uno's, consumers call in their orders, and pick up the food at a special counter inside the restaurants. In addition to the signature deep-dish and thin-crust pizza, everything else on the menu, from sandwiches to steaks and pastas, can be taken home.
Designated takeout counters inside, and reserved parking spaces outside, make it easy for customers to pick up pulled pork sandwiches, barbecued ribs and other entrees at Smokey Bones, the newest restaurant concept from Darden Restaurants. The Orlando, Fla.-based company is the largest owner and operator of casual dining restaurants in the world, operating 1,200 Red Lobster, Bahama Breeze, Olive Garden and Smokey Bones restaurants.
Smokey Bones, which opened in 1999, offers full service in a sports bar setting with a rustic mountain lodge decor. Ball games are aired on TVs throughout the restaurant, and every table is equipped with its own volume control box.
"We think it's unique because it marries award-winning barbecue at a sports bar," said Joe Chabus, spokesman for Darden. Now operating 20 Smokey Bones on the East Coast and in the Midwest, the operator plans to open 20 to 25 more units over the next three years.
While takeout plays a part, the emphasis is on the dining room experience, where company officials are focusing on growth, Chabus said. The same is true at one of the other restaurant chains operated by Darden, Red Lobster. Takeout has been available since Red Lobster opened its first restaurant in 1968, but it's not a priority, a spokeswoman for the chain said, noting the company is concentrating on enhancing full-service dining at its 663 restaurants.
At Il Fornaio, Corte Madera, Calif., strong takeout sales are cushioning the effect of weakened dining room sales at some of the restaurants in the upscale Italian chain, which combines a bakery with a formal dining room concept. Many restaurants are in the Silicon Valley and other technology hubs on the West Coast, communities that have been hard hit by recent layoffs in the technology sector, according to an official with the 24-unit chain.
At the same time, an explosion in new home starts in California has reduced the amount of disposable income people have for restaurant meals, he said.
"They're spending more time at Pottery Barn," said Michael Mindel, vice president of marketing for Il Fornaio. "That doesn't kill our business, but it doesn't help our business. "If we were just a full-service restaurant, it would be much more challenging," he said. "Since we have carryout, it allows us to use another revenue stream that most restaurants don't have."
Cold foods, like sandwiches and salads, are popular takeout items, along with rotisserie chicken, soups, pasta and pizzas, made in woodburning ovens. Carryout has been available since Il Fornaio opened in 1987. Last year, takeout sales represented 12% of overall sales for the chain, according to Technomic.
In recent months, company officials have been encouraged by a slight increase in full-service sales, Mindel said.
Though it's too early to call it a trend, the latest data gives other full-service operators something to cheer about, too. For December 2001, January and February 2002, on-premise dining in casual restaurants increased 6% over the same period a year earlier, while the takeout business at casual restaurants dropped 6%, according to NPD.
"The restaurant industry had a great first quarter," said Balzer of NPD. "Going out to eat in restaurants has picked up again. For the last 20 years, that has not been the trend."
