May 25, 2017

CAKE - Recent Addition of Calorie Counts to Menus Having Little Impact on Dessert Sales

CAKE
By Katie Jacobson
The recent addition of calorie counts to Cheesecake Factory menus has had little impact on dessert sales through late May, and third-party delivery is aiding to-go orders at many stores.

In recent conversations with 10 managers at The Cheesecake Factory Inc. stores, all said there had been no change in dessert sales (approximately 16% of overall sales) at their stores since calorie counts were added to menus in late February/early March. “We haven’t seen a drop-off in dessert sales since we added the calories to the menu. Customers know what they are getting when they come here. They made the decision to splurge before they got here,” one said.

However, while no managers cited changes in dessert order trends related to the recent addition of calorie counts, two said some customers were making different meal choices because of the menu change. “There may be some calorie shifting [since calorie counts were added to menus], but it has not hurt our overall sales or dessert sales. We have such a large menu and there are so many choices, you can still make a good choice at Cheesecake Factory,” one said. The other said, “The overall feeling is people come to Cheesecake Factory to indulge.”

One manager noted some areas of the country have had calories on the menu for a long time (because of city or county restrictions), and in those areas the top-five items ordered did not change. “The company monitored those areas closely, and they did not see a change in what customers ordered,” he said. This knowledge of how customers already had responded to calorie-count detail may have contributed to the company’s decision to keep calories on menus despite the menu-labeling mandate’s deadline being pushed back a year by the Trump administration (see OTR Global’s May 5 snapshot). “We already had it in motion by the time the mandate was pushed back, so it didn’t make sense to redo the menu again,” one said.

Third-Party Delivery Aiding To-Go Sales
The Cheesecake Factory has partnered with DoorDash Inc. to offer third-party delivery at approximately 100 of its 194 locations, which has been boosting to-go orders during April through late-May at many locations. “We have never had delivery before so it was a big deal for us to add it and the company spent a lot of time testing different companies and ultimately decided on partnering with DoorDash,” one said. To-go orders (approximately 11% of restaurant sales) were up yy during April through late-May for all six managers offering DoorDash delivery.

One manager said an important factor in The Cheesecake Factory’s decision to partner with DoorDash was the interface and ability to limit outside access to The Cheesecake Factory’s point-of-sale (POS) system. “It was important to the corporation that the delivery company doesn’t have access to our POS system. Orders come in to the tablet and a Cheesecake Factory employee enters them into our POS system. It is an extra step but it is going well,” he said.

Another manager said DoorDash does all the advertising and payment exchange for delivery orders, and DoorDash pays Cheesecake Factory once a week. Most managers said it has been a fairly seamless partnership and more stores would be adding delivery by year-end. Only one manager said there had been some customer service issues that had to be worked through. “We pride ourselves on exceptional customer service, and we have had some grumpy Dashers [DoorDash delivery people], so that had to be addressed,” the source said.

One manager who has been using DoorDash for approximately four months said his store averages about four delivery orders per day on weekdays and about 12 a day on weekends. Another, who has been using DoorDash for a little over a month, said his store’s delivery sales average $1,000 a week. A third, who has been using DoorDash for almost a year, said delivery represents approximately 25% of his to-go orders, which are up double digits yy.

CakePay Usage Minimal
CakePay, the company’s mobile payment app that rolled out nationwide in April 2016 (see OTR Global’s Sept. 8 snapshot), is used by only a small percentage of customers, according to managers. It is mainly for customer convenience as it expedites customer checkout and speeds up table turns. “It is quick and easy for a customer to pay their check with CakePay and get out of the restaurant quickly, but we have found there is a certain demographic that likes it and uses it but others are reluctant to download the app,” one said. Others said they encourage customers to use CakePay when placing a curbside pickup order because payment is much quicker because it can be done at curbside versus the employee going back inside to run the payment. “A lot of the app usage is with curbside pickup orders. Customers are in a hurry, and CakePay gets them on their way quickly,” one said.

What is an OTR Snapshot?

OTR Snapshots are direct feeds from our editors expressing their views on key issues and events in their industries, within and beyond our core coverage. Snapshots feature industry insights, source commentary, and general observations.