Dive Brief:
- Darden and Uber Eats have expanded their delivery partnership to include a pilot at 10 Cheddar’s Scratch Kitchen locations, the companies said Thursday in a press release.
- Customers can order delivery directly through the chain’s website and app, while Uber Direct handles the deliveries with its driver network.
- Upon completion of the pilot, Cheddar’s expects to deploy the service more broadly across its 182-unit system.
Dive Insight:
The pilot comes several months after Darden began exploring first-party delivery with Olive Garden. Olive Garden initially launched delivery at 100 restaurants, and rolled out the service to all of the chain’s restaurants by the first week of February, CEO Rick Cardenas said Thursday during an earnings call. Olive Garden is reaching more customers through delivery, which is “a meaningful sales building opportunity over time,” he said.
“We learned a lot from the initial pilot at Olive Garden, and that, combined with the success of the full rollout, gave us confidence to quickly move to piloting delivery at Cheddar's,” Chris Chang, chief information officer at Darden, said in a statement.
Darden chose Cheddar’s, which is its third-largest brand by unit count, as its next brand to add delivery to because Cheddar’s food can travel well, Cardenas said. Cheddar’s already does well with on-time and accurate to-go curbside orders, he said.
“Another way to think about it is what brands have a higher percent of sales in regular to-go,” Cardenas said. “Because if you've got a pretty low to-go as a percent of sales, it probably doesn't make as much sense to do delivery.”
Cheddar’s could see similar sales growth to its sister brand. Olive Garden reported delivery volume growth week to week without having to supply much marketing support during the fiscal third quarter, Cardenas said, adding that weekly delivery sales are now double what they were when the chain started the service.
At the end of the third quarter, pilot restaurants had about 2.5% sales in delivery, with other restaurants following a similar trajectory. Delivery tickets are also 20% higher than a typical to-go order, without including the delivery fee, Cardenas said, adding that about 12% of delivery sales come from large party orders like pans of lasagna or trays of fettuccine Alfredo.
So far in the fiscal fourth quarter, the Olive Garden team has been using modest digital activity to drive awareness and will undertake more expansive campaigns with TV ads, as well. The chain started sending communications to eClub members informing customers that Olive Garden offers delivery, which has led to good responses, Cardenas said. Because of this awareness, restaurants that weren’t included in the initial pilot grew delivery faster and are now close to the pilot restaurants in delivery sales volume, Cardenas said.
Operators also said delivery was seamless for them because the program functions essentially as an extension of curbside to-go, but with an Uber delivery worker picking up the order, Cardenas said. Delivery consumers are also similar to to-go guests in terms of demographics. They tend to be younger and in higher income brackets than dine-in guests, he said.
“There's very little overlap between our dine-in guests and our delivery guests,” Cardenas said. “So these are incremental occasions for people and maybe occasions for people that wouldn't normally come to Olive Garden.”
