Quick Service Restaurant Construction After COVID-19
Earlier this year in March, the quick service restaurant (QSR) industry went into survival mode, negotiating leases, adjusting supply chains, delaying construction and tightening finances in an attempt to keep up with changing guidance and safety measures. With the rug swept out from under us due to COVID-19, QSR brands had to learn what worked for endured development from day to night. Now, coming out on the other end, the consumer trends rising to the occasion are ones that have been been established for many years. Interestingly enough, the pandemic only expedited what seemed inevitable for the future of restaurants and is exactly what the QSR and fast-casual industry is positioned for: convenience, speed and consistency.
Drive-thrus drive up in popularity
This first focus for future development may come as no surprise. Even prior to the pandemic, many chains accounted that as much as 70% of revenue was generated from drive-thrus. Throughout the new normal, drive-thrus have been the restaurant industry’s saving grace and most brands were already equipped for the on-the-go service in advance. Therefore, QSR Magazine found 42% of restaurant visits throughout Q2 consisted of drive-thru orders as consumers sought safer, contactless ways to continue getting their favorite food on-the-go. Following in July, once restaurants began to reopen, consumers still preferred their drive-thru methods, as the industry saw a 13% spike in year-over-year drive-thru activity.
Drive-thrus are not only here to stay but they are now a core pillar of future restaurant development. In fact, numerous brands have launched drive-thru only prototypes or heavily focused on the expansion of their drive-thru only concepts this year. This particular prototype was most likely in the works across several brands but got to see the light of day sooner than expected due to heightened demand. As brands prioritize their drive-thrus, the market will become increasingly more competitive for viable real estate. Along with drive-thrus, smaller restaurant footprints will also be key, allowing companies to fit into existing land and shopping centers where available, along with a focus on remodels and conversions of existing units.
Work with what you’ve got
When drive-thrus were not an option for certain restaurant locations, curbside pick-up, delivery and digital mobile ordering increased in popularity, offering another way to generate efficiency and speed of service to guests. With the increased popularity of these options, brands are now forced to integrate them into construction plans in a more sustainable way. For example, expect to see an increase in permanent third-party delivery parking spots and designated curbside pick-up areas in parking lots as a result of efforts to generate overall profitability of unit economics.
Construction plans will also continue to heavily integrate technology, as brands look to streamline their operations and open-up more access to guests. In particular, digital menu boards, self-service stations, automatic doors, touchless components in restrooms and full digital contactless check-out stores will offer options to guests who wish to keep contact to a minimum. While going digital, brands will look to upgrade existing units with more environmentally friendly and sustainable build characteristics that also save money and energy for economic efficiency.
Westward bound
Remember, real estate will now become more competitive as specific prototype needs become prioritized. Therefore, space for future development is more crucial than ever before. Meanwhile, during the second quarter of this year, 51% of property views by urban residents of America’s 100 largest metros went to suburban properties, an all-time high since Realtor.com began tracking metro level search data in 2017. It seems consumers are also seeking out more space for themselves, as they wish to escape city life, enjoy more land at a distance, and continue to work from home while reducing their commutes.
As suburbia becomes more attractive, expect to see a continuation in Western migration to less densely populated areas. In April of 2019, the U.S. Census Bureau released its annual estimates for how the populations of the United States' 3,142 counties and county equivalents changed in the year between July 1, 2017, and July 1, 2018. Specifically, suburban counties in the South and West regions tended to see more people moving in than Midwestern and Northeastern counties. With that, brands are to follow in these emerging markets that offer more land and availability for real estate, such as Nebraska, Kansas, Colorado and Nevada.