Restaurants Race To Deliver: Will Off-Premise Channels Help?
Zacks Investment Research | Sep 19, 2017 11:10PM ET
In order to capitalize on rising demand for their products, quite a few restaurant operators are focusing on growing their off-premise, online-ordering business via delivery, carry-out, and catering.
Particularly, restaurant operators are concentrating on the delivery channel, which is a growing area for the industry, driven by ease of access. By driving incremental sales at the companies, delivery services might turn out to be a strong revenue growth driver in the long term, given huge demand for the same.
Meanwhile, many restaurants are seeing an increase in their take-out business as customers are more willing to relax at home while enjoying their meal. Notably, both take-out and delivery increase a restaurant’s business without significantly raising its operational expenses or demanding an expansion of facility.
Red Robin Gourmet Burgers & Brew, Inc. (NASDAQ:RRGB) is one such company that is moving smartly on new revenue streams. Going forward, the company expects the off-premise orders to become a growth engine in the latter half of the year as it begins to actively promote the new offerings, reach out to more guests, thus driving improved profitability.
In sync with this, the company plans to expand its service to 198 locations from 118, with its current three third-party service providers like Amazon (NASDAQ:AMZN), DoorDash and GrubHub. By fourth-quarter 2017, Red Robin expects to put all corporate restaurants on the call center and have designated in-store pickup areas. In addition, the company anticipates roughly two-thirds of its units to have curbside delivery.
Red Robin currently has a Zacks Rank #3 (Hold). You can see Original post
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