ILLUSTRATION BY DIMITRI MORSON/MIDJOURNEY
it work. They reassessed their operations, technology and packaging to adapt to the off-premise service model. They renovated their restaurants and parking lots and shrunk their dining rooms. Some added novel formats like virtual brands and ghost kitchens to take advantage of the new channel, or developed seatless prototypes that were designed specifically for delivery and takeout. “I see delivery as a step on the evolution of restaurants toward a more systematic form of production,” Backman said. “At a holistic, perhaps simple level, it’s turned a restaurant even more into a factory than it was.” For Denny’s, delivery was not a significant part of its business before the pandemic. But the event opened the diner chain’s eyes to the benefits of the service, which it now views as a strategic advantage. “Especially for a brand like Denny’s where it was majorly focused on butts in seats in our booths … to give us a chance to shift and differentiate our business I think is cool,” said Dylan Taylor-Smith, the chain’s VP of media and digital strategy. During the pandemic, Denny’s invested heavily in delivery, developing custom packaging to ensure breakfast staples like eggs and hashbrowns traveled well. It also retrained staff to account for the quickly growing business and to make sure customers had a good, consistent experience. The chain found that delivery gave it access to a whole new set of customers,
DELIVERY GROSS BOOKINGS ($ BILLIONS) Delivery took off during the pandemic and has continued to grow.
especially younger people who had never been to Denny’s before. “That incrementality is something that no one could ever walk away from and should ever walk away from,” Taylor-Smith said. Denny’s also discovered that delivery fit naturally with its business model. Many of its restaurants are open around the clock, and delivery became something that it could market late at night when most restaurants are closed. To lean further into that advantage, Denny’s launched three delivery-only virtual brands designed to help drive business during dinner and late-night when its restaurants are less busy. Today, Burger Den, Banda Burrito and The Meltdown make up just a sliver of Denny’s overall sales, but they do over-index in those later dayparts. And they are highly incremental: There is just 1% of overlap between customers who dine in at Denny’s and customers who use its virtual brands.
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RESTAURANT BUSINESS APRIL 2025
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