TV ads, signage put curbside, takeout service into high gear: casual chains carry out plan to enhance meals-to-go, rev up sales as result

Nation's Restaurant News, May 19, 2003 by James Peters

Casual-dining chains are maintaining their forward momentum when it comes to marketing-enhanced meals-to-go services and priority-seating initiatives.

As competition remains fierce and the economy continues to sag, several top dinnerhouse operators are using aggressive advertising to support call-ahead-seating programs, improved takeout amenities and the full-service sector's answer to drive-thru--curbside delivery of packaged phone orders.

In order to increase sales in a tight market, "everyone is looking for incremental ways to build the business," says Robert Derrington, a restaurant industry analyst for Morgan Keegan & Co. Inc. "Clearly, consumer convenience is extremely important, and carryout--and especially curbside--addresses that like no other thing that these restaurant operators can do."

Chains that have the funding to advertise the efforts are a step ahead of the competition, Derrington adds. Marketing strategies include placing ads on national and regional TV, and promoting the efforts through in-store and outdoor signage and limited-time coupons.

Outback Steakhouse has seen sales from its curbside-takeaway program leap to 9.2 percent of the chain's sales mix for this year's first quarter, propelled by more aggressive backing from national network and cable TV advertising over the past year. In the year-ago first quarter Tampa, Fla.-based Outback said the offering accounted for 7.4 percent of the sales by its nearly 800-unit steakhouse chain.

"We want to make sure that we're top of mind for those strategic criteria that meet the needs of consumers," says Fulton Smith-Sykes, vice president of marketing and advertising for the steakhouse brand.

Outback chief financial officer Robert Merritt recently said his company has seen weekend sales and customer counts turn "materially positive for the first time in a long time," attributing the boost to advertising the take-away and call-ahead services.

He specifically pointed to the company's call-ahead amenity, in which customers can reduce their wait times by calling the restaurant in advance to place their names on a wait list for tables.

Merritt said call-ahead enables better seat utilization in the restaurants "because bigger parties can come in now and use the bigger [table] tops that heretofore didn't have all of the chairs full because a party of eight probably wasn't going to come and wait in line for two hours."

Although company officials say curbside take-away has resulted in some cannibalization of dining-room sales, Smith-Sykes asserts that the upside greatly outweighs any downside.

"If there's some cannibalization that transpires, it's a part of doing business," Smith-Sykes observes.

Since Applebee's Neighborhood Grill & Bar completed the first phase of its "To Go" program last summer, the takeout has become the fastest-growing part of the chain's business, spokeswoman Laurie Ellison says.

Before the standardized program, to-go sales contributed 4 percent of all restaurant-level revenues at company-owned outlets. In the first quarter of fiscal 2003, takeout sales rose to 6.8 percent of the mix. Of the Overland Park, Kan.-based Applebee's 1,500-plus units, about 25 percent are company operated.

The company attributed the sales jump to a formalized training process for employees, the installation of interior signage and, in most locations, exterior signage for designated parking spots for takeout customers.

Since the fourth quarter Applebee's has used local advertising to support the carryout service, and it expects to support it with network advertising in 2004.

"It is an important part of our local marketing [budget] mix," Ellison says.

Applebee's currently is in the second phase of its To Go initiative, which is focused on curbside delivery. About 200 company-operated units offer curbside delivery either through the front door or a side entrance. Applebee's plans to roll it out to the roughly 170 remaining company units and throughout more than half of its system by the end of the year, officials say.

The nearly 900-unit Chili's Grill & Bar has been using a combination of national network and local TV spots focused on To Go for a couple of years now, says Tim Smith, a spokesman for the chain's Dallas-based parent, Brinker International Inc.

"It's a definite part of our rotation and mix on an ongoing basis," Smith says.

The advertising has helped takeout sales grow about 1 percent, to 9 percent of Chili's sales for the third quarter ended March 26, compared with year-earlier results.

Most of the company-operated Chili's units, which account for about 85 percent of the system, feature designated carryout-only parking spaces, side entrances and takeout counters, Smith says.

A Chili's sister brand, the nearly 196-unit Romano's Macaroni Grill, also saw a rise of about 1 percent in to-go sales, to about 6 percent of total volumes, for the third quarter, Brinker officials indicated.

Ruby Tuesday Inc. recently said it plans to roll out its curbside service to about 300 freestanding, company-operated locations by the end of September. In addition, the company projected that roughly 100 freestanding franchised units would have curbside service in less than a year, senior vice president Rick Johnson says. Currently about 65 to 70 company units and "fewer than" 25 franchised restaurants offer the brought-to-your-car service, Johnson says.