Covid-19 is changing consumer buying habits and the restaurant vertical serves as a good example of this. Both store employees and consumers are looking to reduce contact when ordering and picking up food and beverages, and drive-through service is the right solution. Quick service restaurants and fast casual shops that have drive-throughs have been best positioned to weather the pandemic shutdown which has restricted in-store dining. So it’s no surprise that Starbucks is looking to expand their drive-through service. McDonalds reports that 90% of their sales have been via drive-through, compared with a pre-Covid 60%. Chipotle also has plans to add more drive-through service at its restaurants. Try driving by a Chick-fil-A and be prepared to see a line of cars wrapped around the parking lot in queue for the drive-through lane. Hungry customers will find that mobile order and pay, combined with drive-through service, will be a regular part of their future restaurant visits.
The following Wall St. Journal article reports more on this topic which is excerpted below:
Starbucks Corp. said it is speeding up plans to build stores with drive-throughs and will close locations in unpopulated malls as its dine-in service remains suspended due to the coronavirus pandemic. The Seattle-based coffee company said Thursday that U.S. same-store sales are now down 35 to 40% from last year, after it closed dine-in operations starting in March. “We know that it will take time to fully recover and post positive comparable-store sales growth,” chief executive Kevin Johnson said in a letter to employees.
The letter provided the company’s first business update since it opened more than 85% of its owned U.S. stores to drive-through, delivery and carryout earlier this month. Less than half of its U.S. company stores were open last month. Starbucks, which said it expects 90% of its stores to reopen by early June, offered no details on when cafe dining service may resume.
Big restaurant companies, including McDonald’s Corp. and Starbucks, are dealing with a long list of new costs to operate safely during the pandemic. McDonald’s chief executive Chris Kempczinski said Thursday that changes in customer behavior brought by the coronavirus bring ongoing uncertainty to its business.
Overview provided by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group.