Dive Brief:

• P.F. Chang's plans to open a to-go model in Chicago that will focus on carryout, catering and delivery, according to the Chicago Sun-Times. The concept will open just weeks after P.F. Chang's last standard format closed in the city.
• The first to-go location will open on Feb. 3 and will feature about 80% of the chain’s typical menu.
• P.F. Chang's plans to open additional to-go locations, including two more in Chicago, as well as in the New York City, Washington, D.C., and Houston markets.  

Dive Insight:

As demand for off-premise meals increases, now accounting for 60% of all dining-out occasions, more restaurants are shrinking their footprints to focus on these off-premise channels — a move that can save money on occupancy and labor costs. P.F. Chang's closed a full-service restaurant in Chicago on Jan. 14 due to a non-renewable lease, but is opening the 2,000-square-foot to-go location just weeks later. 

At P.F. Chang's this switch could pay off. Chris Demery, SVP of off-premise dining, told the Chicago Sun-Times that off-premise business is growing at two to three times the pace of dine-in.

Casual dining chains in general are finding much success growing sales through these channels. Consider Bloomin' Brands, for example. The chain reported that off-premise business now made up about 17% of sales during Q3, up from 14% from the prior year. For The Cheesecake Factory, off-premise made up 16% of total sales during Q3 2019. Delivery made up 35% of those off-premise sales. 

Despite this trend, P.F. Chang's has no plans to phase out its 219 U.S. dine-in restaurants. 

However, P.F. Chang's is certainly not alone in opening up new dining opportunities, showcasing a shift toward convenience. Applebee's is testing a new fast casual format, Applebee's Express, in Mobile, Alabama. Applebee's sister chain IHOP announced it will also launch a new fast casual brand, called Flip'd, in the spring. Famous Dave's is also experimenting with a smaller format and a fast casual restaurant while Buffalo Wild Wings launched B-Dubs Express in 2018. This trend toward smaller formats isn't just a casual dining focus. Brands like Starbucks and Chopt are also opening pickup and delivery-only locations.

Still, it is casual dining that has been hit the hardest from oversaturation and retrenchment in recent years. A strategic shift to a more relevant and efficient model, one that focuses on where the customers are, is one way to stop the bleeding. Those customers, particularly younger ones, are increasingly off-premise. While over one-third of adults in the U.S. are more likely to order food for delivery compared to two years ago, half of millennials say the same, for example. Millennials are three times more likely to order delivery than their parents, according to UBS, and casual restaurants will need to adapt to benefit from this trend.