Marketplace Logo Donate

Daily business news and economic stories from Marketplace

Drive-thrus are keeping the restaurant business rolling

Heard on:
A customer at a McDonald's uses the drive-thru window in March in Hicksville, New York.

Drive-thru restaurants are faring better than full-service eateries. Bruce Bennett/Getty Images

get the podcast

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.

What's Next

Latest Episodes From Our Shows

Listen
5:34 PM PDT
27:58
Listen
4:40 PM PDT
26:43
Listen
1:33 PM PDT
1:50
Listen
7:55 AM PDT
6:18
Listen
Sep 30, 2022
5:03
Listen
Sep 29, 2022
2:55
Listen
Aug 9, 2022
24:46
Exit mobile version