The coronavirus pandemic has changed the way a lot of businesses operate. Retailers, for example, have had to rethink their store layouts to allow for wider aisles and improved traffic flow. Similarly, restaurants have had to push tables farther apart in an effort to adhere to social distancing requirements.
This shift has impacted fast food establishments, too. In fact, a number of popular chains took steps to change their design due to the pandemic. Here are a few notable adjustments.
1. Burger King
Burger King, a Restaurant Brands International (NYSE: QSR) chain, unveiled two new restaurant designs earlier in the year that feature more room for drive-thru orders and smaller dining areas. Customers will be able to drive up to a designated spot, order meals through an app, and have their items delivered straight to their vehicles.
Chipotle (NYSE: CMG) opened its first digital-only restaurant in New York. The new design doesn’t include a dining room but rather a small waiting area for patrons to hang out until their food is ready. Customers will need to order their meals ahead of time using an app. Once they’re ready, they’ll be expected to come in, pick up their items, and go.
KFC, which is owned by Yum! Brands (NYSE: YUM), revealed two new designs last year. One gets rid of the restaurant’s dining area, and the other expands its drive-thru area for on-the-go customers who order meals through an app.
McDonald’s (NYSE: MCD) introduced a redesign that focuses on a better drive-thru experience for customers. It features automated order taking and express pickup lanes for diners who place digital orders using an app. It also features a more simplified menu. Additionally, the chain is testing concepts for restaurants with limited seating that are largely dedicated to drive-thru orders.
Starbucks (NASDAQ: SBUX) is building walk-thru locations that don’t include seating. Coffee lovers will preorder their food and drink through an app and walk in to retrieve them, but there won’t be room to congregate.
6. Taco Bell
Taco Bell, also owned by Yum! Brands, is reducing its dining room space and adding drive-thru lanes earmarked for customers who order meals ahead of time using an app. The design also includes curbside pickup for customers and masked employees who take orders outdoors using tablets.
What do these changes mean for real estate investors?
All of the above redesigns have a few things in common: less space, less indoor seating, and a faster flow of customers. While focusing on contactless ordering is a smart move during the pandemic, these new layouts also mean more efficient ordering, something apt to be a huge selling point for customers even once the pandemic is over.
From a real estate investing perspective, these new stores are a mixed bag. While it’s good to see fast food chains innovating and making plans to open new locations, all these designs require a lot less square footage, which translates to less expensive leases and less revenue for commercial landlords.
That said, rethinking these restaurants’ layouts could pave the way to more locations in bustling cities where space is a prized commodity. And this is something that could really work to investors’ benefit.