Dive Brief:

• Less than four out of 10 tableservice operators and QSRs offer delivery, with 33% of QSRs, 39% of casual dining and 25% of fine dining establishments providing the service, according to the National Restaurant Association's 2019 State of the Restaurant Industry report. Comparatively, 52% of fast casual restaurants provide delivery.
• Every restaurant segment reported an increase in delivery sales compared to two years ago, including casual dining (72%), family dining (63%), fine dining (55%), QSRs (49%) and fast casual (64%). Fewer than one in 10 casual dining, family dining and fast casual operators reported a decline. 
• Eight out of 10 fine dining and casual dining operators and two-thirds of family dining operators said they use a third-party operator for delivery. Comparatively, limited-serve operators were more likely to use their own service, with 55% of QSRs and 48% of fast casual restaurants reporting they run their own delivery service.

Dive Insight:

The growth of delivery in the casual dining segment is particularly surprising since there has been pushback of late among top brands, namely Olive Garden and Texas Roadhouse, that have no plans to provide third-party delivery. The relatively low take-up rate also means there is still plenty of room for growth in delivery, which can be used as a competitive advantage.

Many brands have been expanding their delivery programs, including Cracker Barrel, BJ's Restaurants, Dine Brands' IHOP and Applebee's, The Cheesecake Factory, Bloomin' Brands and Denny's. Delivery, takeout and catering are providing additional revenue streams for the sector that has long-struggled with slumping same-store sales and traffic.

Many of these restaurants are increasing awareness of delivery by offering promotions. For example, The Cheesecake Factory launched a recent $25 giveaway to 10,000 people to use at DoorDash just months after it gave away 40,000 free slices of cheesecake via the delivery provider. Increased awareness should drive additional delivery sales, and as of last year delivery makes up nearly one-third of The Cheesecake Factory's off-premise sales.

Another interesting trend that could help casual dining is that customers have been blending at home meals with takeout and delivery. Forty-three percent of adults say they are more likely to include a restaurant-prepared item such as a main dish, side or dessert alongside a meal they prepared compared to two years ago, according to the National Restaurant Association's report. That could mean more promotions for certain items, like dessert, made available via delivery, and more marketing opportunities for operators.