Food delivery is evolving dramatically with the recent rise of mobile-app-based delivery services such as GrubHub, Door Dash, Uber Eats, Postmates, and a handful of others. A natural extension of ride-sharing services like Uber and Lyft, these apps are expanding delivery far beyond the world of pizza and Chinese food. In 2017, fast food titan McDonald’s began testing delivery at 200 restaurants in Florida. Today, through partnership with Uber Eats, they offer delivery at 5,000 US locations and 12,000 locations worldwide – though they are reportedly having issues keeping fries warm. Similarly, Chipotle partnered with Door Dash in April to offer delivery at 1,500 of its 2,500 locations. Papa Murphy’s, the bake-it-yourself pizza chain has been experimenting with delivery over the past 18 months and now offers delivery at over 400 locations, through a combination of third-party and in-house delivery.
Drive-thrus are only gaining relevancy and should be a top consideration when planning pad-site development. Long a staple of the fast-food franchise, more and more fast casual players are getting into the drive-thru game. Concepts such as Panera, Jimmy John’s, and Starbucks are increasingly locating, and relocating, at sites that accommodate their drive-thru model. Starbucks recently reported plans to build out 80 percent of its 600 planned 2019 locations with drive-thrus. Many won’t even have interior seating. The coffee giant reports that drive thru locations have 25-30% higher sales volume than those without. Fast casuals such as Raising Caine’s and Potbelly have fully embraced the drive-thru concept as well. Even Chipotle, with its intense counter Q & A, is rolling out drive-thru prototypes; however, these drive-thrus will only accommodate meals that are pre-ordered through the chain’s mobile app. The Mexican fast-casual leader is now prioritizing leases in spaces that can be adapted for drive thru use in the future, even if it is not part of the initial design.
Take-out service is on the rise as well. Most chain restaurants now have apps that allow customers to pre-order their food and either jump to the front of the line, or have their food brought out to their car. More and more restaurant leases contain provisions reserving parking spaces for “take-out only” customers.
As demand for delivery, take-out, and drive-thru service rise, restaurants can do more with less square footage. In the case of delivery, visibility and access become less important as well. This is bad news for landlords who, in recent years, have benefitted from intense competition among a wave of new fast casual concepts all vying for the same high-rent outparcels along busy corridors.
Moving forward, evolving consumer demands will have a polarizing effect on restaurant operations. On one end of the spectrum, full service restaurants have to become even more compelling destinations in order to compete for consumer’s time. This translates into increased experimentation with restaurant layouts and formats, and higher demand for restaurant space in atmospheric and walkable neighborhoods. On the other end of the spectrum, many establishments will ramp up efforts to cater to convenienceoriented diners, resulting in a decreased demand for large foot-prints and increased demand for drive-thru capability and take-out accessibility.