The continued rise of drive-thru only restaurants
How the quick service space is adapting to changing markets
It is evident that drive-thru spaces are witnessing increased competition. No longer is it solely burger and coffee chains seeking drive-thru endcap real estate; now, Chipotle, Sweetgreen, and even taco chains are vying for these limited spaces.
Certain players have taken this competition a step further by constructing sites with no dining rooms whatsoever. These sites typically feature a drive-thru, often complemented by an infrequently used walk-up window. This trend emerged during the pandemic, but several of our clients continue to pursue the construction of these units today. This approach allows brands to achieve several objectives:
- Smaller footprints, some even below 1,500 square feet, unlock real estate opportunities that are not being actively pursued by others.
- Reduced operational complexity enables lower staffing levels amid rising labor costs.
- Lower construction costs compared to full-service units.
- Filling in markets where demand is high but establishing a full-service unit may lead to excessive cannibalization.
While drive-thru only units may yield lower revenues than full-service sites, they serve as another tool in your market planning toolkit. With this trend being relatively new, it remains to be seen whether the reduction in sales still results in a positive ROI. Whether this trend is merely a passing phase lingering from the pandemic or signifies a permanent shift in how brands select real estate is yet to be determined.
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