Citing a thriving economy and robust job market, the National Restaurant Association had high hopes for restaurant industry sales predicting $889 billion in 2020 revenue. Then COVID-19 hit, and the world as we knew it turned upside down.
The Darwinist effect from the crisis forced the foodservice industry to reinvent itself. With restrictions on indoor service, outdoor dining has become a mainstay and repurposed parking lots and street parking spots to extend restaurant space has become the norm. Bold players like DoorDash lead the pivot pack, partnering with restaurants on ghost kitchen collectives to use fully-staffed kitchens that handle cooking, delivery, and fulfillment on their behalf.
Last year, the fast-food industry’s revenue was estimated to be about $200 billion in America and $570 billion globally. Their business model includes efficiencies with a monopoly on consumer convenience, pioneering contactless and mobile payment options, and honing the ubiquitous drive-thru experience. Analysts estimate that Americans conduct 6 billion drive-thru visits each year to an estimated 200,000+ drive-thru locations. Historically, 60-70% of QSR sales for certain chains came from drive-thru lanes.
Life in the Fast Lane
Before the pandemic, Wendy’s attributed 90% of their sales and McDonald’s 70%, to drive-thru transactions, with the average American spending as much as $1,200 annually on fast food. Last year, McDonald’s heavily invested in enhancing the drive-thru user experience. In addition to installing digital menu boards, the fast-food chain experimented with camera technology to recognize license-plate numbers (apparently the new IP address) to customize suggested purchases from a customer’s previous orders.
Amid increased consumer demand, Taco Bell also uses tech to streamline its drive-thru services. Managing order-ahead sales via Taco Bell Go Mobile, it will also use smart kitchen technology to detect a customer’s arrival to expedite pickups. The eatery also plans to double-up on its drive-thru lanes, offering dual lanes to accommodate drive-ins and curbside pickups.
Burger King will incorporate a similar layout with three lanes, with one dedicated to delivery drivers. Its parent company, Restaurant Brands International, plans to modernize 10,000 drive-thrus across Burger King and Tim Hortons locations by mid-2022. Upgrades will include digital screens with predictive selling technology integrated with restaurant loyalty programs and remote, contactless payment systems.
Top ranking QSRs like Starbucks and Chipotle paved the way for restaurateurs, grocery, convenience stores, and COVID-19 rapid test sites to prioritize drive-thrus and mobile ordering apps. Shake Shack will debut its first drive-thru concept in “traditional suburban high-traffic quarters,” in addition to the “Shack Track,” a dedicated digital pickup window for pre-ordered food early next year. Upscale salad bar Sweetgreen has plans to launch a drive-thru concept in suburban markets out west and Wawa’s chain of convenience stores will open its first drive-thru, as an expansion of its East Coast portfolio.
The drive-thru experience has seen accelerated growth, hitting an all-time high in Q2, as consumers looked for safer and convenient ways to dine out. Earlier this year, drive-thru visits skyrocketed, with 77% of consumers feeling the safest when getting their food from drive-thrus. Another take, inspired by the pandemic confinement, is that folks are looking for a manageable means of escape to lessen their boredom by seeking sanctuary in their cars. According to the Ford Trends 2021 report, more than one in four adults globally use their vehicle to relax or find alone time, with 17% saying they use it as a place to work. With social distance protocols in place and gas prices at a low, more folks are spending time in their cars, using drive-ins and drive-thrus to maintain distance – creating a bit of traffic havoc – to prevent the spread of the coronavirus.
What’s your take on the drive-thru phenomenon? Do you have an experience you’d like to share? Follow me on Twitter @anjeesolankiCRE and get in on the conversation.