Early stages of Denny’s Corp.’s nine-month-old “On Demand” platform are producing off-premise sales increases of as much as 2 percentage points, executives said Tuesday.
The Spartanburg, S.C.-based family-dining brand saw off-premise transactions grow from 6.6 percent of total sales in December 2016 to 8.7 percent of total sales in December 2017, said John Miller, Denny’s CEO and president, in a fourth-quarter earnings call.
The “Denny’s On Demand” platform was introduced in May 2017, offering web and mobile ordering and payment options for pick-up and delivery in many units.
“We're making good progress addressing guest expectations for greater convenience,” Miller told analysts.
“Holidays continue to be exceptionally strong business days for off-premise sales,” Miller explained.
“And Christmas Day set a new record at 12.8 percent of total sales.”
For the fourth quarter ended Dec. 27, Denny’s domestic systemwide same-store sales grew 2.2 percent, including an increase of 2.1 percent at company-owned restaurants and 2.2 percent at franchised restaurants.
Denny’s fourth-quarter net income rose 16.6 percent to $13.1 million, or 19 cents a share, from $11.3 million, or 15 cents a share, in the same period a year ago. Revenue increased 4.5 percent, to $135.5 million from $129.6 million in last year’s quarter.
Miller said the “On Demand” to-go transactions continue to be incremental and they over-index at the late-night and dinner dayparts. They also skew toward a younger customer, he said, especially the 18- to 34-year-old demographic.
The to-go product mix leaned more toward pancake plates, burgers, milkshakes and build-your-own entrée options than typical transactions.
“Approximately 50 percent of the domestic system is actively engaged with one or more delivery-service option, and we continue to add master partnership agreements with third-party delivery providers where available,” Miller said.
“We anticipate continued long-term growth in off-premise sales from the ‘Denny's on Demand’ platform as more restaurants sign these individual delivery agreements or add a second delivery option in their locations,” he said.
Denny’s in January featured a television commercial that promoted both value and the “On Demand” platform by offering a free Build Your Own Grand Slam with subsequent online orders, he said.
Miller said the Denny’s was also expanding its international growth.
In 2017, the company opened seven new international restaurants, including three additional openings in the Philippines and its first units in both Guatemala and the United Kingdom.
The company now has 128 restaurants abroad with about 80 planned international openings, he said.
As of Dec. 27, Denny’s had 1,735 franchised, licensed and company restaurants.
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