Drive-thru ordering surged during the pandemic. Fast-food chains don't think it's a fad
- Drive-thru ordering surged over the last year as the coronavirus pandemic shuttered indoor dining and made consumers wary of entering restaurants.
- Industry experts believe that drive-thru ordering will stay above pre-pandemic levels, even after everyone is vaccinated.
- Fast-food chains are ramping up investments to make their drive-thru lanes more efficient, while more fast-casual restaurants are adding their first drive-thru lanes.
Last March, restaurant sales sharply fell after governors banned in-person dining and consumers began working through their glut of stockpiled groceries. But after several weeks, a new trend took hold, illustrated by long drive-thru lines that wrapped around the perimeter of fast-food locations.
Checkers and Rally's was one of the many fast-food companies that benefited from the shift. With more than 800 locations, it's the largest restaurant chain with double drive-thru lanes in the country.
"We had the most tremendous year last year," said CEO Frances Allen. "We recorded record same-store sales gains and have created significant momentum."
The crisis coincided with the chain revamping its menu, helping revive sales. To keep up with the spike in demand, about two thirds of Checkers and Rally's restaurants shifted one of their drive-thru lanes to handle digital and delivery orders.
After decades as a fast-food staple, drive-thru lanes became the superstar, helping fast-food chains' sales rebound faster than those of its full-service brethren. By December, drive-thru lanes accounted for 44% of off-premise orders across the entire restaurant industry, according to the NPD Group. As vaccine distribution ramps up across the United States, the popularity of drive-thru ordering appears to have staying power, although industry experts predict that it will moderate some.
"I think as people get more vaccinated, drive-thru ordering will go down some, but I don't think it will go down to previous levels because this heightened awareness of germs is here to stay and some people are just used to doing things differently now," said Lisa van Kesteren, CEO of SeeLevel HX, which conducts an annual study of drive-thru lane service.
Adrianne, a 27-year-old living in Wichita, Kansas, agrees. She's worked at a Starbucks with a drive-thru lane for several months.
"Order ahead, delivery and in-person might fluctuate, but drive-thru is a constant necessity," she said.
Other drive-thru workers say that the extra stress of their jobs looks unlikely to stop for many months. Randy, a 30-year-old working in Michigan, said that he's wanted to quit his job many times, and his location has a very high turnover rate. According to him, the focus switched from connecting with customers to making sure orders were filled in under a minute.
Higher volume and larger orders slowed down average drive-thru times by 29.8 seconds, according to SeeLevelHX's 2020 study, which was conducted from June through August using secret shoppers. KFC, which is owned by Yum Brands, topped the list and was one of the few chains that managed to trim times.
The chain's U.S. President and Chief Concept Officer Kevin Hochman credited KFC's family fill-up buckets, which saw double-digit growth last year. Hochman is also serving as interim U.S. president of Pizza Hut, KFC's sister chain. In response to the higher average ticket, KFC added a $30 fill-up deal to its menu to address the trend of bigger orders.
"Packing a 12-piece bucket versus an eight-piece bucket, that's pretty darn easy to do, versus making eight sandwiches – it's a very different model," Hochman said, adding that other fast-food chains are now adding bigger value meals to their menus.
Hochman is predicting that some drive-thru traffic transitions back to KFC lobbies as consumers get vaccinated. The fried chicken chain is testing pick-up cubbies, with the expectation that their customers will be looking for even faster ways to grab their food after the pandemic.
The shift to drive-thru ordering has also further increased the competition between the fast-food and fast-casual sectors. Chains like Sweetgreen and Shake Shack have announced plans to add drive-thru lanes. Chipotle Mexican Grill, which had been rolling out its drive-thru lanes for digital-orders only, said it would accelerate plans to add more "Chipotlanes" to its footprint.
But even before the pandemic, fast-food chains were investing in their drive-thru lanes, giving them the upper hand. McDonald's spent more than $300 million on Dynamic Yield, an artificial intelligence company that would help the company nudge drive-thru customers to spend more. (The company is now exploring selling Dynamic Yield's third-party business.)
Those investments to make drive-thru lanes more efficient have only accelerated in the last year. Chains like KFC and Restaurant Brands International's Burger King have designed new restaurant formats that highlight the drive-thru lane and downgrade to smaller dining rooms.
Arby's Chief Operating Officer John Kelly said that the Inspire Brands chain has been working on making its production more efficient over the last three to five years. Many of its kitchens now operate with two sets of workers assembling orders to keep up with the flow.
"We certainly didn't upgrade all of our restaurants during Covid, there wasn't enough time or manpower to do that, but we had already been on our way, and we accelerated that in 2020," Kelly said. "And we'll continue to upgrade those in our restaurants certainly where there's volume today but also for the future."
Van Kesteren pointed to automation as another big trend stemming from the surge of drive-thru orders during the crisis. McDonald's and White Castle are both testing artificial intelligence software with the aim of taking drive-thru orders more quickly and accurately.
"Before, there was automation being explored and completely automated lanes and kiosks were being tested, but this has greatly accelerated that," she said.
Kelly said that Arby's is investing in technology that will be better able to inform general managers how to staff a restaurant as traffic fluctuates. During the busiest of times during the pandemic, Arby's had assigned many of its restaurant workers focus on single task, whether it was taking orders or filling drinks.
"So they're not always trying to catch up on where the business is going, but actually get ahead of it," he said. "I think we've learned a lot of that during Covid, and we're going to keep that moving forward."