Metro Diner turns to fast service as offsite services increase
Metro Diner’s strategy changed drastically when COVID hit. Co-Chair Hugh Connerty calls it the “Netflix Effect”.
People learned that they loved having meals at home without having to go out, pushing the restaurant to reinvent takeout packaging and perfect its offsite execution. As a result, off-the-four-wall sales have increased from 7% pre-COVID to around 30%.
“It’s like adding a dozen more tables inside restaurants,” says Connerty, a longtime restaurateur who founded Hooters, helped expand LongHorn Steakhouse and became Outback’s first franchisee.
Breakfast took a major hit in the early weeks of the pandemic as customers changed their morning routines and opted for meals at home. But as the restrictions have been lifted, the day game has seen a fairly significant recovery. In the three months ending November 2021, according to The NPD Group, online and physical visits to restaurants for breakfast increased 11%, compared to a 10% decline in the same period a year ago. year.
While the Metro Diner, which has around 60 units, was thrilled that customers were switching to new ordering channels, the extra activity had a double effect. There were additional revenues, but also logistical issues for a kitchen designed to serve a number of people.
To compensate for the dramatic increase in offsite orders, Connerty decided it was time to bolster operations in the form of takeout-only kitchens, with the first iteration debuting in Charlotte, North Carolina several years ago. weeks.
Customers can order breakfast, lunch, and brunch items (dinner times will be added in the future) through the Metro Diner website or third-party delivery apps such as Grubhub, DoorDash, and Uber Eats . The new outlet, open from 7 a.m. to 2:30 p.m., complements the operations of three existing full-service restaurants in the Charlotte metropolitan area. In its first weeks of operation, the offsite-only store brought in over $2,000 on Saturdays and Sundays.
The location is an old commercial kitchen remodeled to meet the needs of Metro Diner. With some equipment and infrastructure in place, Connerty estimates it cost less than $250,000 to get the unit up and running. All future take-out units will not exceed 1,200 square feet.
“It has much lower overhead than retail outlets and it’s much more affordable,” he says. “The take-out locations cost less than $300,000, and if we can generate at least $1 million in revenue, it’s obviously worth it.”
Metro Diner is the latest full-service chain to create stores that lean more into takeout and delivery. Other examples include Buffalo Wild Wings, PF Chang’s, TGI Fridays, mermaidsFriendly’s, Famous Dave’s and Bennigan’s.
Although restaurants’ relationships with third-party delivery companies have been tenuous during the pandemic, Connerty says the platforms have done well in promoting brands, especially to younger customers who use the websites several times a week. Even with the fees, he believes partnerships are beneficial and serve as an additional marketing tool.
Metro Diner listened to complaints related to speed, quality, and overall experience, and all were taken into consideration as the chain fine-tuned its off-site operations.
“When that driver hands you a bag from Metro Diner, we want it to look fantastic,” he says. “It is sealed, it has handles and there is a clean transfer. And unless the driver returns this bag in the car, everything will be perfectly packed.
The brand also addressed the portability of its breakfast staples.
“In general, do I think the take-out food experience is as good as the restaurant experience?” he asks. “Absolutely not, but that statement can be made about any restaurant. So what we did was adjust the materials to make sure things like eggs aren’t all over the place and everything works. I personally test these things all the time by ordering here at the office just to see how it turns out.
As new units are built, Metro Diner is focused on developing an app and loyalty program, which should facilitate targeted messaging to consumers, as well as average frequency and verification. higher.
The company is also doing its best to maintain a differentiated value proposition in a record environment. inflation.
“We think Metro offers great value for money,” he says. “We know everyone in the supply chain is having issues, but we just don’t think the time is right to raise prices like a lot of people are doing. We are not a public company and our view is that sometimes you make more money in certain years and sometimes you make less. We want to keep the price level where it is, and we told our partners that we were going to make a little less money right now, and that’s fine.
A second offsite-only unit is planned for Tampa, Fla., to help out the busiest kitchen in the entire system, which Connerty can only describe as a “three-ring circus.” If the initial outlets are successful, more to-go kitchens will be introduced in other established markets, such as Delaware, Alabama, Indianapolis and Jacksonville, Florida.
“There are still a lot of people who don’t want to go out to eat and prefer to stay at home,” he says. “It’s never been easier to do this.”