Casual restaurant sales were hit by the COVID-19 pandemic in 2020, but bounced back in 2021, with most major brands posting double-digit gains in a year plagued by the virus spike.
While restoring seating capacity to dining rooms and retaining a significant share of the sales outside of premises that have grown during the pandemic, the casual dining segment has seen some of the most striking increases in sales in 2021.
As they grapple with surges from the variables of the COVID-19 virus, companies have also looked to virtual brands to expand their reach and take advantage of increased kitchen capacity, continuing to work with streamlined menus to streamline operations, streamline managers’ jobs, and help with retention rates.
In this year’s Top 500, the top five casual dining players saw their sales increase between 18% and 44%.
Sales of Olive Garden, the Darden restaurant division in Orlando, Florida, rose 18% to $4.185 billion.
Rick Cardenas, who succeeded Jen Lee as Darden’s CEO on May 30, said in a December earnings call that the brand’s focus on simplicity during the nearly two-year pandemic has helped Olive Garden emerge in strength.
“Our focus on streamlining processes to drive execution remains our top priority, which is why we once again held off any new initiatives during the quarter in order to eliminate distractions and allow our operators to focus on making big shifts,” Cardenas said. “This pause also ensures they can focus on the people and the product, as we navigate our current staffing and supply chain challenges.”
Darden is also offering for a year, through January 2022, a proposed commitment to increase the minimum hourly earnings for restaurant team members to $12, which included income earned through tips.
“This primarily affects entry-level roles such as hosts, washers, and dishwashers. With this change, we expect our restaurant team members to earn, on average, approximately $20 an hour,” Cardenas said, adding that the pay increases were help with retention.
Dallas-based Brinker International’s Chili’s Grill & Bar Company reported a 22% increase in sales to $3.921 billion for 2021.
“Brinker’s fourth quarter was a positive end to a successful fiscal year, with Brinker recording one of the most profitable quarters in recent history,” said Brinker CEO and Chairman Wayman Roberts, who was succeeded this month by former US KFC President Kevin Hochman.
Brinker pioneered the creation of virtual brands, Wings and Maggiano’s Italian Classics, to exist as delivery-only vehicles. Roberts also oversaw the expansion of virtual brands in drone delivery and the addition of bot servers to Chile’s employee assistance units.
Meanwhile, Applebee’s Neighborhood Grill & Bar saw sales growth of 34.4% to $3.742 billion, versus $2.785 billion in 2020.
“Last year has delivered strong growth for our business that can best be determined by our higher results, record Applebee sales performance for the full year compared to 2019, and significant improvement in gross profit and the ability to resume recapitalization to shareholders,” said John Peyton, CEO of Dynbrands in Glendale. California, on a note expiring this year.
Applebee also enjoyed the pop culture spotlight in 2021 with “Fancy Like,” a country hit by musician Walker Hayes.
Ranked fourth among the major casual restaurant chains in the NRN Top 500, Buffalo Wild Wings is owned by Atlanta-based Inspire Brands. The sports tape concept saw sales grow 17.5% to $3.718 billion. To attract off-premises customers, the brand debuted in 2021 in a Buffalo Wild Wings Go store format, which features a walk-in table, digital menu boards, condensed seating and takeout-ready lockers for contactless pick-up.
Texas Roadhouse, which tops the top five by percentage increase in sales, tops sales by 44.4% to $3.415 billion. The cheesecake factory, based in Calabasas Hills, California, also saw sales grow 44%, to $2.199 billion.
During the pandemic, Texas Roadhouse converted its lobby areas into off-premises sales execution areas and was looking to convert some restaurants with permanent pickup areas. In the fourth quarter, Texas Roadhouse continued to find ready sales were strong, at 17.1%, or $120,706 on average per week, in company-owned units.
“We had a historic year in terms of the number of guests we served and our operating results,” said Jerry Morgan, CEO of Texas Roadhouse. “This is all because of the hard work and commitment of our operators and their ability to continue delivering our legendary standards in these challenging times.” The company also opened 29 company restaurants during the year.
The external channel produced by the pandemic continued to be a strong source of revenue for most casual food brands in 2021.
Darden’s Cardenas said technology improvements have also boosted product outside the workplace.
“To-go sales have continued to benefit from the power of our digital platform,” he said at the end of the year. “This platform not only makes it easier for our teams to implement, [but] It makes it more convenient for our guests to visit, order, pay and receive.”
In the second quarter, Darden’s last full reporting period in 2021, offshore companies accounted for 28% of total sales at Olive Garden and 15% of total sales at LongHorn Steakhouse.
“Digital transactions accounted for 60% of all out-of-premises sales during the quarter and 11% of all Darden sales,” Cardenas said.
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