FIREHOUSE SUBS DIRECTOR OF NATIONAL OFF-SITE SALES FEATURED IN RESTAURANT BUSINESS
AS PANDEMIC EASES, DIGITAL SALES PROVE STICKY
Even with more people returning to dining rooms, online channels for many restaurants are remaining stable or even growing.
Restaurants' digital sales aren't going away—at least not yet.
Even as vaccination levels rise and more people return to dining rooms, online and delivery channels appear to be rolling right along, a promising sign for the industry as it emerges from the pandemic.
From the first week of February to the last week of March, in-store restaurant sales grew 13%, according to software supplier Paytronix, while online sales grew by about 3%.
"None of these online ordering platforms are slowing down. They’re all still booming," said Alex Canter, CEO of online ordering company Ordermark and director of business development for Canter's Deli in Los Angeles.
Delivery volume at Canter's is still "through the roof," he told Restaurant Business last week. The classic deli has been fielding more than 300 orders a day from Postmates alone, with dining room capacity in LA capped at 50%.
When things reopen fully, "maybe we’re doing 250 orders a day, but it’s not going to drop off completely," Canter said.
Other restaurants have reported a similar dynamic as dining rooms reopen. Digital sales for Chipotle Mexican Grill grew 133.9% year over year in Q1, with about half coming from its order-ahead Chipotlane drive-thrus. The chain also recovered 60% of its pre-pandemic dine-in sales in the quarter.
"We had record sales for our digital business, despite the fact that our dining rooms are opening, so I think it just demonstrates the power of both access modes, meaning the in-restaurant dining access mode and the digital access mode," Chipotle CEO Brian Niccol said on an earnings call with investors last week.
And at Firehouse Subs, delivery sales doubled during the pandemic, a rate that has not wavered much recently.
"Even before the pandemic, delivery was becoming mainstream. And of course, amid COVID, the use of delivery has been accelerated," said Risa Rappaport, the chain's director of off-premise operations, in an interview. "We really anticipate seeing that continuing."
There are both pandemic and economic factors that could be contributing to the continued digital boom in recent months. About 30% of Americans are now fully vaccinated, so there is a significant portion of people who might still be avoiding dining rooms. Many consumers received $1,400 federal stimulus checks in the first quarter that likely spurred restaurant spending, particularly on pricier services like delivery. And the period also included some big events, such as the Super Bowl and March Madness, that resulted in record delivery business for some restaurants.
But many restaurants and observers who are bullish on the long-term future of digital channels have said they believe customer behavior has been permanently altered. A new survey of 1,984 consumers by Paytronix and payments publication PYMNTS seems to support that theory: It found that 92% of fully vaccinated restaurant customers plan to continue using online ordering post-pandemic at least as often as they did during it. The remaining 8% said they will return to on-site dining like they did before.
The growth of both dine-in and online sales could also suggest that consumers are simply using restaurants more often, and in a variety of ways, after they became a source of convenience during the pandemic.
"I do think that there is a percentage that has shifted to ordering from restaurants more often than people would," Canter said. "And I think a lot of families learned how convenient and easy it is to click a button and have food arrive 45 minutes later."