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Drive-thrus are keeping the restaurant business rolling

Sabri Ben-Achour Nov 2, 2020
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Drive-thru restaurants are faring better than full-service eateries. Bruce Bennett/Getty Images
COVID-19

Drive-thrus are keeping the restaurant business rolling

Sabri Ben-Achour Nov 2, 2020
Heard on:
Drive-thru restaurants are faring better than full-service eateries. Bruce Bennett/Getty Images
HTML EMBED:
COPY

Friendly’s restaurant chain filed for Chapter 11 protection Sunday, joining a list of other chains declaring bankruptcy. Pizza Hut, Chuck E. Cheese, Le Pain Quotidien have all filed for bankruptcy since the pandemic started.  

But some chains are booming during COVID-19. Chipotle, for example, said it plans to hire 10,000 more workers. So who’s winning and who’s not as we eat our way through the pandemic?

Down the street from John Gordon’s house is a Burger King that recently shut down. 

“Burger King is one of the global brands that’s gotten overstored in the United States and even in the rest of the world,” said Gordon, a restaurant expert at Pacific Management Consulting Group.

He said a lot of chains knew even before the pandemic they had too many locations. Now they’re downsizing. But many chains are also adapting. At that same corner where the Burger King was, there was a Starbucks.

“They closed, and they just moved into the Burger King,” Gordon said. “Now they have a brand-new store with a drive-thru that’s going to double their sales easily.” 

In a pandemic, the less contact with customers the better, and the chains that can pull that off are doing all right. 

Pizza chains that deliver have mostly done well. Chipotle is expected to grow its drive-thru stores from 100 to 1,000 in the next five years, according to Andrew Charles, a restaurant analyst with Cowen and Co.  

“Safety is now paramount, and obviously convenience is No. 2,” he said.

But there are some chains that are based on contact with customers and dining in, like Denny’s and IHOP, which aren’t doing so great. 

“The full-service restaurants will decline at a much faster rate on the chain side,” said Darren Tristano, CEO of Foodservice Results. He said they’re going to keep losing market share to more grab-and-go type places. “And that trend will likely continue for years to come.”

Basically if there’s a restaurant chain whose food you love to eat but you don’t really care where you eat it, it’s probably doing well. The places where you like to hang out are probably in some trouble.

COVID-19 Economy FAQs

What do vaccines mean for economic recovery?

COVID-19 is not going anywhere anytime soon, according to expert witnesses who testified at a recent hearing held by the Joint Economic Committee. Put simply, we can’t eradicate the virus because it infects other species, and there will also be folks who choose not to get the vaccine or don’t mount an immune response, according to Dr. Céline Gounder at NYU School of Medicine & Bellevue Hospital. “That means we can’t only rely on vaccination,” Gounder said. She said the four phases of recovering from the pandemic are ending the emergency, relaxing mitigation measures, getting to herd immunity and having long-term control.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

What do I need to know about tax season this year?

Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.

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