Fast food business in transition
The renaissance of the drive-in counter
There is one word that representatives of the fast food industry do not like to hear: fast food. Instead, they speak of “Quick Service” – a quick and uncomplicated service. The gastro division is suffering from the corona crisis. Now she is turning.
After severe setbacks in the corona crisis, Germany‘s fast food industry wants to expand its car pick-up counters to keep customers in line.
While the classic restaurant business collapsed with waiting times at the counter, sales via “drive-ins” or “drive-thru” increased. At Burger King, the car share of total sales before Corona was a third, in summer it rose to more than 45 percent. At the market leader McDonald’s, the proportion of automobiles climbed from 30 to 50 percent of the sales of the drive-in branches in the spring.
More and more customers wanted a meal delivery without going into the restaurant, says Burger King Germany boss Cornelius Everke. “The drive-in branches helped us a lot in finding our way through the crisis.” In November, a good two thirds of the food was taken from the car counter, the rest was collected from the restaurant and from delivery services. The high November share is also due to the fact that consumption in the restaurant is currently no longer due to corona measures.
Competitor Kentucky Fried Chicken (KFC) also reported an increase in the share of drive-in sales from 27 percent before the pandemic to around 65 percent in the summer; in November it was 85 percent. “The crisis caught us, and sales initially went down in Corona times, but drive-in pushed us,” says KFC Germany boss Marco Schepers. 110 of 174 restaurants have a car counter. “We were able to quickly switch to other sales channels apart from the classic counter business, that helped us.” KFC expanded its delivery service: At the beginning of the year, in-house couriers were on the road for 20 KFC restaurants, now there are more than 60. Lieferando takes on the delivery service in 40 other restaurants.
Kentucky Fried Chicken presented an expansion strategy on Thursday, according to which in smaller cities, where there is no KFC until now, 25 new restaurants are to be opened per year by 2025. For example, it is about Villingen-Schwenningen (Baden-Württemberg), Dülmen (NRW), Coburg (Bavaria) and Meppen (Lower Saxony). There is great potential there, says Schepers. “KFC is still something new for the people there.” In its expansion, KFC relies almost exclusively on bars with a car counter.
The company has had a mixed year. The 20 locations at airports and train stations collapsed in sales. The 30 or so restaurants in shopping centers also performed poorly. On the other hand, the restaurants with drive-in were able to shine, their revenues increased by double digits over the course of the year. “In the summer months we even posted an overall increase of two to three percent,” says the manager. For the whole year, however, KFC is also expecting losses: After 267 million euros in 2019, according to a company forecast, Germany‘s sales in 2020 will drop to a little more than 250 million euros.
One size larger than KFC is Burger King, which operates 750 restaurants in Germany and had annual sales of around one billion euros in 2019 – and is expecting a decline this year. The orphaned offices in city centers, the home office boom and the restrictions on going out had hurt Burger King, says Germany boss Everke. Those who work at home don’t get coffee or breakfast on the way to work. And the young people don’t stop at Burger King in the evening before or after the disco. ”
Nevertheless, company boss Everke is satisfied in view of the adverse Corona circumstances. Locations at motorway service stations, train stations and airports were indeed failures, but restaurants with car counters in cities were in demand. “In Corona times, people want to eat tried and tested food, but at the same time keep their distance.” This is made possible with the drive-ins and the delivery service function. Investments in the website and the app also paid off. As a result, the Burger King brand remains present with customers despite restrictions in pandemic times, says the manager.
Everke expects that Corona will change the industry lastingly. “Customer frequency in city centers has already decreased due to online trading, it could drop even further.” Locations with favorable traffic conditions on the outskirts of the city or on the green meadow would be more attractive, there would also be enough space for access to the car counter. It is also clear for Burger King: New restaurants should have a drive-thru in the future.
Experts see the industry in upheaval. Consumer demand has changed radically, says Boris Tomic from the industry magazine foodservice. “The packaged, easy-to-take-away or deliverable meals are a great advantage compared to restaurants with service,” says the specialist. “And the drive-ins are another trump card when it comes to attracting customers.”
According to figures from the market research company npdgroup, the fast food chains got away with a black eye in corona times. “In September the entire catering trade in Germany took up a quarter less than in the previous year, while the Quick Service account was only minus 11 percent,” says market researcher Jochen Pinsker. Quick Service means all restaurants and points of sale where take-away food is an important factor, including kebab shops.
For years, the car counters were more of a compulsory task for the US chains in Germany. “Nowadays, the younger generation often doesn’t have a car at all, so the demand was sometimes rather moderate,” says Pinsker. The corona crisis has changed that, now many consumers no longer wanted to go to the restaurant and are therefore grateful for the pick-up option at the car window: “People now feel better when they are traveling by car – the drive-in is experiencing a renaissance will continue after Corona. ”