Dive Brief:

• Red Robin is testing the addition of Donatos Pizza to its delivery menu as a way to boost off-premise sales. According to Restaurant Business, the burger chain is also offering Donatos Pizza in store. 
• The test is currently underway in 24 out of Red Robin’s 572 units. 
• The Columbus, Ohio-based pizza chain currently operates 170 units throughout the Midwest.

Dive Insight:

Donatos president Tom Krouse is especially optimistic about this co-branded partnership’s potential, telling Columbus Business First that it could allow the pizza chain to expand beyond its Midwest footprint. Indeed, if the test expands, Donatos would be able to leverage Red Robin’s national presence to familiarize new customers with the brand. 

The test also allows Donatos to expand without much capital. Red Robin’s locations would act as a sort of ghost kitchen for the brand, offering the kitchen space and other logistics without the heavy real estate costs. 

For Red Robin, the partnership could be even more significant. The chain has posted negative comp sales in the last 10 out of 12 quarters and experienced a 5.5% traffic decline during the first quarter alone. Co-branding with another concept and adding a new platform is one way to generate more traffic. Pizza and burgers complement each other in a way that could bring customers back for more occasions during the lunch and dinner dayparts. 

Adding pizza could also boost Red Robin’s delivery game, a major focus area for the chain. During Red Robin’s Q1 call in May, CEO Pattye Moore said off-premise business has grown by over 20% year over year and is now generating nearly 12% of the company’s total revenues. Moore added that Red Robin is looking to increase its reach with additional third-party partners. Pizza, the delivery staple, could help the company continue on this trajectory. 

The test requires some kitchen reconfigurations to make room for an additional oven, but otherwise there haven’t been exorbitant costs, according to the Columbus Business First article. 

If there are any trip-ups to this test, it could be added operational complexities that come anytime a new menu platform is added. The new oven may not cost a lot, but it adds to a back-of-the-house process. There could also be a disconnect for some customers confused as to why there is pizza available on a traditional burger menu, but that can be solved with the right marketing message. Red Robin’s tagline is gourmet burgers and brews. Gourmet burgers, brews and pizzas could be a natural extension.