IHOP and Chipotle test in-house deliveries to keep customers fed

A look at the top restaurant retailers from NRF’s 2020 Top Retailers list

The National Retail Federation’s annual report on the Top 100 Retailers is based on sales for the most recently completed fiscal year. The Power Player charts look at retailers with 2019 U.S. sales equal to or greater than 10 percent of sales of the category leader.

Fast food chains came roaring out of the pandemic restrictions, regaining lost year-over-year sales in large bites. Not so much for white tablecloth and higher-end restaurateurs, where as many as one in four establishments won’t make a go of it in the aftermath of the coronavirus crisis, according to Steve Hafner, CEO of online reservation service OpenTable.

2020 Top 100 Retailers List

NRF's Top 100 Retailers ranks the industry’s largest companies according to sales. 

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Food delivery certainly assisted restaurants in maneuvering through the extemporaneous rules and regulations imposed during the crisis. What many restaurant operators discovered, however, was that third-party delivery services such as Uber Eats, Grubhub, DoorDash and Postmates, can be expensive.

As a result, several are building their own delivery infrastructures. “It is a direct connect between us and the guest. That’s our preference,” said Steve Joyce, chief executive of Dine Brands Global, which owns Applebee’s and International House of Pancakes. Chipotle Mexican Grille and Cheesecake Factory are among other chains testing in-house deliveries.

While the fast food segment is thriving, some companies within the group are expected to outperform the others, including Wendy’s and YUM! Brands, according to Brian Bittner, an analyst at Oppenheimer & Co.

Wendy’s, which only recently started a full-scale breakfast program, saw same-store sales drop 26 percent at the height of the COVID-19 scare, then improve to only negative 2.1 percent by the first week in May, when many locations still were not in full operation.

Bittner sees Wendy’s as having, “potential for an industry-leading recovery among peers and potential for positive earnings revisions.”

As for YUM!, he says its business, “appears to be following a similar path to most restaurants: A strong start to 2020, significant sales disruption in March followed by sequential improvements in April. Focus now turns to the trajectory of the recovery, subsequent trends in franchisee health and ability for YUM! to sustain its strong unit growth model.”

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