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Fast food chains are thriving, some more than others - Restaurant Business Online

The Bottom Line

We’ve heard it plenty enough by now: The drive-thru has fueled much of the restaurant industry over the past nine months. With nowhere to go, eager for restaurant food and uneager to cook and clean, consumers went and waited in drive-thru lines. It did not appear to matter how long they were.

All of this fueled growth in the sector most known for them.

At Taco Bell, for instance, the chain served 30 million more cars last quarter than in the same period a year before and did so 17 seconds faster. Same-store sales at the chain rose 3%. At sister chain KFC, where in the U.S. same-store sales soared 9%, drive-thru sales increased 60% last quarter.

It helped that customers have been making large orders for families, which has fueled sales of KFC’s buckets of chicken.

Rival Popeyes Louisiana Kitchen’s same-store sales rose 19.7%, thanks largely to the chicken sandwich but also because sales of the chain’s other products have proven popular.

The burger market has also proven to be mostly popular among consumers these days. Same-store sales at Wendy’s rose 7% last quarter, thanks to the introduction of its breakfast and a drive-thru-centric business. McDonald’s also credited the drive-thru with its best month in nearly a decade when same-store sales hit the double digits in September.

Likewise, Jack in the Box same-store sales rose 12.2% last quarter and the company is actively talking about expansion for the first time in years.

It’s not just these companies, however. Privately-held chains with drive-thrus have performed remarkably well, such as Zaxby’s and Wienerschnitzel. No wonder more fast-casual concepts are pushing to add more drive-thru windows to their restaurants.

Not everybody has done all that well, however.

Same-store sales at Burger King declined 3.2% in the third quarter and was seemingly on the road to recovery before comments from large franchisee Carrols Restaurant Group suggested that they’ve stumbled since then.

Carrols operates 1,000 Burger King locations, or about one out of every seven of the chain’s U.S. restaurants, making its performance quite relevant. In addition, Carrols traditionally outperforms the chain’s overall numbers. That makes the franchisee’s 3.2% decline in October quite noticeable.

Burger King’s apparent stumbles in October are odd, considering that it typically performs on par with its rivals and the pandemic has generally been kind to the fast-food business. Carrols itself suggested tough comparisons and a consumer running out of money for its challenges. Others, however, have said its heavy reliance on discounts could be making it tough for them to get customers without them.

Still, the general performance of the fast-food businesses have helped these companies return to some form of normal. Both Burger King and Wendy’s are offering 2-for-$5 offers and McDonald’s has unleashed a series of marketing campaigns to lure customers to its restaurants.

Continued shutdowns will likely keep customers coming back, too, and a weakened economy is always better for fast-food companies that offer cheap food. In short, the quick-service business has won the pandemic.

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Fast food chains are thriving, some more than others - Restaurant Business Online
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