Hospitality spotlight: driving growth through drive-thru

Drive-thru restaurants have traditionally been associated with the US where car-bound Americans pull up at the window to collect their order of burgers, fries and shakes. But since COVID-19 they have become increasingly visible in the UK and now represent one of the fastest growing parts of the hospitality industry.

Big brands lead the way

Between 2019 and August 2022 drive-thrus have added £500 million of sales, according to NPD Group, which found consumers spent £2.9 billion via the channel for the year to the end of August 2022 versus £2.4 billion in 2019. This has pushed up demand for sites, with rents having risen from £25-35 per sq ft pre-pandemic to around the £35-45 level.

Not surprisingly, everybody wants a piece of the action. The likes of Costa Coffee is spending £20 million on such sites while Starbucks has identified drive-thrus as a key area of focus in the UK. They are fighting for sites along with both established players such as KFC, Burger King and McDonald’s as well as newcomers including fried chicken chain Popeyes, Indian brand Chaiwala, Canadian operator Tim Horton’s, and even stalwarts like Greggs.

The famed vegan slice seller has taken its drive-thru estate to 15 locations and more are on the way. It is also experimenting with 24-hour trading at such units as it recognises the opportunity for greater volumes to be driven from these outlets compared with its regular high street units.

Mobile markets

One of the attractions of drive-thru sites is the ability to drive greater sales densities. Diners typically spend £5.27 per person in a drive-thru compared with £4.18 in a dine-in restaurant, according to NPD. This has very much been the experience of Burger King and its 150-plus drive-thrus in the UK where transactions are around 30% larger.

These super-sized figures means we are likely to see a lot more such units opening up but the UK has some way to go before it can even come close to hitting the levels of penetration seen in the US. For McDonald’s, its drive-thru units accounted for as much as 70% of total orders even before the pandemic hit.

Incredibly as many as 47% of consumers in the US say they will not consider frequenting a fast-food restaurant unless it includes a drive-thru, according to a survey by OnePoll. This popularity has led many brands to face increasing problems coping with the numbers of cars now pitching up at their outlets.

Pre-order popularity

The solution for many operators is to encourage ordering ahead via their websites and apps. This is a variant of click & collect where the customer does not have to actually leave their car to collect their orders. McDonald’s is currently experimenting with a small-format test restaurant designed to provide its digital customers with added convenience when using the drive thru, pick-up and delivery services including an additional Order Ahead Lane in its drive thru that lets customers who ordered on the app skip the queue.

Chipotle is also very active on this front with its Chipotlane drive-thrus that only handle digital pre-orders. They have become a primary feature at the majority of its new restaurants. These lanes not only speed up the service to customers but also generate average sales 15% higher than non-drive-thru locations. Other operators are following this strategy with the likes of Sweetgreen and Chick-fil-A introducing ‘express’ order-ahead drive-thru lanes. It is a similar story at Taco Bell.

Tech tactics

Drive-thrus are also proving to be a hotbed of technology developments as the major food brands look to maximise the efficiency of the units and cope with the high volumes of traffic. This includes automating the ordering process with artificial intelligence (AI)-powered technology. McDonald’s is experimenting with a solution from IBM while Panera Bread (sister company of Pret A Manger under the ownership of JAB) has introduced an automated solution into a number of test outlets to improve speed of service as well as order accuracy.

Rival solution ConverseNow is working with Domino’s and claims it enables restaurants to double their order volume at peak times. Meanwhile Del Taco and Checkers & Rally’s have been rolling out an AI voicebot from tech firm Presto that includes an automated upsell function that has helped drive average sales 6% higher when orders are taken through the software.

Final thoughts

Such activity highlights how important drive-thrus are to the hospitality industry and although much of the current technology experimentation is taking place within the US it will inevitably cross the Atlantic and play a part in the UK scene in due course as the technology becomes more advanced and cost effective.

What we can also be sure about is that the drive-thru looks set to become an even more prominent feature in the UK hospitality industry where there is certainly a lot of road to cover before the scene gets anywhere close to matching that in the US.

Glynn Davis

Glynn Davis is a business journalist specialising in the retail and food and drink sectors. As well as writing for publications including Retail Week, Ecommerce Age, Propel, Caterer and Retail Bulletin, he’s also the founder and editor of Retail Insider and Beer Insider.