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Applebees and Olive Garden are changing the fast casual formula

Olive Garden restaurant.
AP Photo/Steve Helber
Big changes, and not just to the menu.
  • Michelle Cheng
By Michelle Cheng

Reporter based in New York

Published Last updated

About a third of Applebee’s and Olive Garden customers are now eating their riblets and fettuccini alfredo at home.

In the three months that ended Feb. 27, Olive Garden said pickup and delivery orders represented 30% of total sales. That’s up from 14% in 2019. Meanwhile, Applebee’s off-site orders made up 27% of all sales in the final three months of 2021, up from 12.8% of sales in the same period two years earlier, reported CNN.

The suburban restaurant is now online

The changes signal a shift in the fast casual restaurant model. Olive Garden’s tagline is, “When you’re here, you’re family”—evoking the promise that it can replicate cozy, family-style meals, without the hassle of meal preparation or clean up. Likewise, Applebee’s slogan, “Eatin’ good in the neighborhood,” suggests a small town chumminess, a place to meet friends for an after work drink or dinner.

But the lines between work and life have now blurred—scarfing down a meal before the next Zoom call is more relatable than having time for a date night out. It also helps that technology, where you can order with a touch of a button, has made takeout easier than ever before.

Fast casual restaurants leading growth will be leaning into changing dining habits, David Portalatin, a lead advisor on food and foodservice at NPD, a consumer research firm, recently told Quartz. “Ultimately our eating occasions are becoming more fluid,” he said. “They’re less time bound, they’re less place bound. And so the food has to go where the consumer is and has to meet their needs on any given occasion.”

The jump in off-premise sales doesn’t necessarily make them more profitable for restaurants than dining in. Liquor laws for takeout vary by state in the US, but consumers are likely to order fewer drinks to go than while dining in, even where it’s allowed. Alcohol comes with high profit margins for restaurants, making up as much as 30% of restaurants’ revenues.

Olive Garden said it does not use third-party delivery services, showing that big chains don’t necessarily need to outsource delivery, allowing them to avoid high service fees.

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