The casual-dining segment’s sales were devastated by the COVID-19 pandemic in 2020, but they surged back in 2021, with most big brands registering double-digit gains through a year that was buffeted by virus surges.
While restoring seating capacity to dining rooms and retaining a sizable share of off-premises sales grown during the pandemic, the casual-dining segment experienced some of the most eye-popping increases in sales in 2021.
As they wrestled with surges from variants of the COVID-19 virus, companies also looked to virtual brands to extend their reach and leverage excess kitchen capacity, and they continued to operate with simplified menus to ease operations, streamlining managers’ jobs and helping retention rates.
In this year’s Top 500, the top five casual-dining players saw their sales increase between 18% and 44%.
Olive Garden, the division of Orlando, Fla.-based Darden Restaurants, increased sales by 18%, to $4.185 billion.
Ric Cardenas, who succeeded Gene Lee as Darden CEO on May 30, said in a December earnings call that the brand’s emphasis on simplicity during the nearly two years of pandemic helped Olive Garden emerge strongly.
“Our focus on simplifying operations to drive execution remains our top priority, which is why we once again paused any new initiatives during the quarter in order to eliminate distractions and allow our operators to focus on running great shifts,” Cardenas said. “This pause also ensures they can zero in on people and product, as we navigate through the current staffing and supply chain challenges.”
Darden also moved up by a year, to January 2022, a proposed commitment to increasing the minimum hourly earnings for restaurant team members to $12, which included income earned through gratuities.
“This primarily impacts entry-level roles such as hosts, bussers and dishwashers. And with this change, we expect our restaurant team members will earn, on average, approximately $20 per hour,” Cardenas said, adding that pay increases were helping retention.
Dallas-based Brinker International’s Chili’s Grill & Bar posted a 22% increase in sales to $3.921 billion for 2021.
"Brinker's fourth quarter was a positive finish to a successful fiscal year, with Brinker posting one of its most profitable quarters in recent history," said Wyman Roberts, Brinker’s CEO and president, who was succeeded this month by former KFC U.S. president Kevin Hochman.
Brinker was a leader in creating virtual brands, It’s Wings and Maggiano’s Italian Classics, to exist as delivery-only vehicles. Roberts also oversaw expansion of the virtual brands into drone delivery and added robot servers to Chili’s units to help staff members.
Meanwhile, Applebee’s Neighborhood Grill & Bar saw sales grow 34.4% to $3.742 billion, up from $2.785 billion in 2020.
“This past year delivered strong growth for our business that can best be defined by our top-line results, Applebee’s record-setting full-year comp sales performance relative to 2019, marked improvement in gross profit and the ability to resume returning capital to shareholders,” said John Peyton, CEO of Glendale, Calif.-based Dine Brands, in a note ending the year.
Applebee’s also enjoyed the pop-culture spotlight in 2021 with the song “Fancy Like,” a country smash from the musician Walker Hayes.
Ranking fourth among the major casual-dining chains in the NRN Top 500 was Buffalo Wild Wings, which is owned by Atlanta-based Inspire Brands. The sports-bar concept saw sales grow 17.5% to $3.718 billion. To appeal to the off-premises customers, the brand debuted in 2021 its Buffalo Wild Wings Go store format, which features a walk-up counter, digital menu boards, condensed seating and heated takeout lockers for contactless pickup.
Leading the top five pack in terms of percentage increase in sales, Louisville, Ky.-based Texas Roadhouse saw sales soar by 44.4% to $3.415 billion. The Cheesecake Factory, based in Calabasas Hills, Calif., also saw sales grow 44%, to $2.199 billion.
During the pandemic, Texas Roadhouse had turned its lobby areas into fulfillment areas for to-go off-premises sales and was looking to convert some restaurants with permanent pick-up areas. In the fourth quarter, Texas Roadhouse continued to find to-go sales were strong, with 17.1%, or $120,706 on average per week, at its company-owned units.
“We had a historic year in terms of the number of guests that we served and the operating results that we generated,” said Jerry Morgan, Texas Roadhouse’s CEO. “This is all due to the hard work and commitment of our operators and their ability to continue to deliver on our legendary standards in these challenging times.” The company also opened 29 company restaurants during the year.
The pandemic-produced off-premises channel continued to be a strong revenue source for most casual-dining brands in 2021.
Cardenas of Darden said that technology enhancements had also strengthened the off-premises product.
“To-go sales continued to benefit from the strength of our digital platform,” he said at the end of the year. “This platform not only makes it easier for our teams to execute, [but] it makes it more convenient for our guests to visit, order, pay and pick up.”
In the second quarter, the last full reporting period for Darden in 2021, off-premises accounted for 28% of total sales at Olive Garden and 15% of total sales at LongHorn Steakhouse.
“Digital transactions accounted for 60% of all off-premises sales during this quarter and 11% of Darden's total sales,” Cardenas said.
Contact Ron Ruggless at [email protected]
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