The pandemic is permanently changing fast food as Wendy's, Burger King, and Chipotle double down on high-tech drive-thrus
Wendy's, Starbucks, and Chipotle are among the many fast-food chains building or renovating locations to beef up their drive-thru business.
- Chains are also investing in drive-thru-centric technology, with
Taco Bell, Wendy's, and Burger Kingannouncing renovations and new store designs.
- "Of all the lessons we learned during COVID, the power of the drive-thru was overwhelmingly evident," Dunkin' US president Scott Murphy said on a call with investors last week.
- Post-pandemic, the fast-food landscape will be skewed even farther in the direction of the drive-thru, with a new emphasis on mobile ordering and predictive technology.
As a wave of fast-food chains report earnings, the drive-thru has emerged as the star of the industry.
Wendy's was the latest chain to name-drop drive-thrus on Wednesday, with CEO Todd Penegor saying on a call with investors that the chain has "a new appetite to look at drive-thru only restaurants."
The company is developing new prototypes, with a "conversion task force" in place to revamp locations, Penegor added.
Wendy's isn't alone. Other chains that have recently announced major investments in their drive-thru business include:
- Starbucks, where larger drive-thru orders boosted same-store sales in the US in the most recent quarter. "We remain focused on our strategy of developing drive-thru locations largely in suburban and semi-rural locations, extending the reach of the Starbucks brand with high volume, high margin stores," CEO Kevin Johnson said on a call last week.
- Taco Bell debuted a new restaurant design focused on drive-thrus for mobile orders. "Drive-thru demand skyrocketed this quarter, as Taco Bell served over 30 million more cars and was 17 seconds faster year-over-year," said Yum Brands CEO David Gibbs.
- Dunkin' saw double digit-sales growth at drive-thrus in the most recent quarter. The chain is testing new tech, including new digital menu boards, line-busting handheld tablets, and a new speaker system. "Of all the lessons we learned during COVID, the power of the drive-thru was overwhelmingly evident," Dunkin' US president Scott Murphy said.
- Burger King and Tim Hortons are revamping 10,000 drive-thrus with high-tech updates. "The urgency got ramped up a bit with the pandemic," parent company Restaurant Brands International's chief information officer Frank Liberio told Business Insider.
Fast-food restaurants are fundamentally changing
The deluge of drive-thru
Even as indoor dining rooms are allowed to open, many chains have found that relying on drive-thru instead of reopening indoor dining is a more profitable solution. As we can see with Starbucks and Wendy's, more drive-thru-centric locations will be built and remodeled across the US.
What these drive-thrus look like is also shifting away from the old-fashioned lanes of yore.
Chipotle is opening a fleet of mobile-order-centric "Chipotlanes," while Shake Shack plans to open its first-ever drive-thru in 2021 with a lane dedicated to app and delivery orders. Before the pandemic, McDonald's spent $300 million to buy artificial intelligence startup Dynamic Yield, allowing the chain to install new predictive tech in drive-thrus.
The post-pandemic world will be filled with more drive-thrus, with better technology. But, even as chains boast about the profit margins these locations offer, indoor dining won't be abandoned completely. Roz Brewer, the head of Starbucks' US business, said last week that as indoor seating opens, customer immediately return to coffee shops.
"When we opened the cafe for limited seating, the response is immediate," CEO Kevin Johnson said. "And the impact on same-store comp is immediate. Customers are craving that and we do it in a safe way."
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