How Drive-Thrus Have Reshaped the Real Estate Market for Franchise Brands
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How Drive-Thrus Have Reshaped the Real Estate Market for Franchise Brands

How Drive-Thrus Have Reshaped the Real Estate Market for Franchise Brands

Despite the pandemic effectively being behind us, the world continues to grapple with its effects. One of the most noticeable is how consumer behavior has shifted in the realm of dining preferences. With safety concerns and social distancing measures still on people’s minds, traditional dining experiences have taken a back seat to more convenient and contactless options. Among these, the rise of drive-thrus and mobile ordering has been particularly pronounced, reshaping not only the way people eat, but also the landscape of the commercial real estate industry.

Doubling up on the drive-thru

One of the most striking developments in this trend is the newfound popularity of drive-thrus beyond the typical breakfast rush. In the pre-pandemic era, drive-thrus were predominantly associated with early-morning coffee and breakfast runs. However, the past four years have seen a significant expansion in their usage, with consumers increasingly turning to drive-thrus for late breakfast and early lunch options. This shift reflects a broader change in dining habits, where convenience and speed have become paramount considerations for consumers.

There has been a notable increase in the demand for drive-thrus equipped with multiple lanes. What was once a rarity—double drive-thrus or even those with three or more lanes—has now become a sought-after feature among consumers. This surge in demand is evident in the success of chains like Shake Shack, whose drive-thru locations have consistently outperformed their traditional counterparts since the onset of the pandemic.

Coffee fueling growth

According to recent data from NRN's Top 500 report, sales within the limited-service coffee segment experienced a remarkable surge, growing by more than 12 percent from 2021 to 2022. This surge underscores a fundamental change in how consumers approach their coffee rituals, influenced by the evolving landscape of pandemic-induced restrictions and safety concerns.

Further, insights from Placer.ai reveal a noteworthy transformation in consumer preferences, with drive-thrus now constituting approximately 70% of total sales for QSRs and coffee concepts. This marks an uptick from the pre-pandemic era, when drive-thrus accounted for about 60% of total sales. The convenience and mostly contactless nature of drive-thru service have undoubtedly played a pivotal role in shaping this shift, as consumers prioritize safety and efficiency in their dining experiences more than did have pre-Covid.

Real estate implications

While the proliferation of drive-thrus has undoubtedly transformed the dining landscape, it has also had ripple effects across the broader real estate industry. The increased demand for drive-thru-friendly locations has led to a shift in the types of properties sought by restaurant chains and investors. Smaller buildings with larger drive-thru capacities are now in high demand, reflecting the evolving needs of both consumers and businesses in the aftermath of the pandemic.

Moreover, the rise of mobile ordering has further accelerated this shift, allowing consumers to place orders ahead of time and minimize wait times at drive-thrus. While this has undoubtedly increased convenience for customers, it has also reduced dwell times in the segment, posing new challenges for businesses looking to maximize throughput without compromising service quality.

The pandemic has ushered in a new era of dining behavior characterized by a greater reliance on drive-thrus and mobile ordering. This shift has not only altered the way people eat, it has reshaped the dynamics of the real estate market, with a growing emphasis on drive-thru-friendly properties. As consumer preferences continue to evolve in response to ongoing challenges, adaptability and innovation will remain essential for businesses seeking to thrive in this new landscape.

Ginny Gaylor is an award-winning writer and editor based in Greensboro, North Carolina. She has more than 25 years of experience writing on a variety of topics from home furnishings to health care, hospitality to lifestyle. She can be reached through her website, ginnygaylor.com.

Published: May 20th, 2024

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