Franchise News

Del Taco looks beyond the after-party crowd to feed professional night owls

Late-night pit stops for food are no longer just for college kids and young adults looking to sop up a few beers with a burger and fries.

The rise of the "gig economy," more freelancing and less traditional nine-to-five office hours, has altered eating patterns and led to an increase of people looking for meals at odd hours.

Nurses working the graveyard shift, Uber drivers looking for a quick, on-the-go meal before heading to pick someone up at the airport or factory workers getting off the third shift, all need a place to eat. And Del Taco is pitching itself as the place to go.

The fast food Mexican chain makes 25 percent of its sales from orders placed between 8 p.m. and 6 a.m., Barry Westrum, chief marketing officer at Del Taco, told CNBC. And each year that percentage is growing.

To bolster these overnight sales further, Del Taco, which has more than 560 locations predominantly on the West Coast, is adding a few new items to its late-night menu at the end of this month, catering to this crowd.

"We've been in the late-night business for some time now, but what we have noticed is that some of our competitors have actually started to back off late-night hours and late-night promotions," Westrum said. "So we really see this as an opportunity to steal some market share."

Growing same-store sales at restaurants has been a challenge, especially as customers have more options of where to eat out and more companies are offering discounted food. This has many restaurants expanding outside of their traditional breakfast, lunch and dinner offerings.

"Unsurprisingly, a lot of this demand comes from students and so outlets near college campuses often see a good spike in sales," Neil Saunders, managing director at GlobalData, told CNBC via email. "However, there are also other pockets of demand from workers with unsociable hours, people who are travelling and those who may have been out and about and too busy to get dinner."

Westrum said that late night tends to get a reputation for just being for the "after-party crowd," but that Del Taco sees more people coming into their restaurants who are working nontraditional hours and either looking for either a late dinner or an early breakfast.
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