Pandemic takeout demand ‘very sticky,’ TGI Fridays CEO says
Pandemic-era eating habits haven't faded, according to the CEO of restaurant chain TGI Fridays.
The fast-casual chain known for its bar and grill setting saw to-go orders surge during the COVID-19 pandemic. More than two-and-a-half years later, customers are still craving takeout.
"Prior to the pandemic, about 9% of our revenue domestically, and even less than that internationally, was generated away from restaurant," TGI Fridays CEO Ray Blanchette told Yahoo Finance Live (video above). "Today, we see that is north of 30%. So when the pandemic first started, we thought, well, that might not last. But we're actually seeing that it's very sticky."
The continued demand for takeout comes as the overall cost of food rose 11.4% in August compared to the prior year, according to the Bureau of Labor Statistics' monthly Consumer Price Index (CPI). The food away from home category spiked by 8.0% year over year, but that increase was less than the rise in grocery prices, which were up 13.5% on a 12-month basis.
Blanchette added that the resilience of consumers in the face of inflation and the "significant" demand for dining out makes for a "dynamic marketplace."
"It's caused us to even rethink some of our external relationships," Blanchette said. "We're working with [food tech platform] C3 and some of their sexy brands to do virtual brands to fulfill that need for away from restaurant or in-home dining that you don't prepare yourself."
In August, the American food chain expanded its partnership with C3 (Creating Culinary Communities), a food and beverage platform that bets on digital kitchens. The partnership, which originally started in August 2021, brought in an additional $1 million dollars per TGI Fridays location, Restaurant Dive reported.
TGI Fridays hasn't pulled back on in-person dining and overseas expansion either.
Last week, the company announced it teamed up with Master Franchisor Universal Success Enterprises to develop 75 new restaurants throughout South and Southeast Asia over the next 10 years.
Currently, the chain comprises 385 franchised restaurants in over 52 countries, with 22 new locations opening in 2022.
"We're seeing some really meaningful year-on-year growth," Blanchette said, "and people have a desire to get back and socialize and reconnect, and we think we're a great solution for that."
Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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