The Effects of COVID-19 on Quick-Service Restaurants

Quick-service restaurants (QSR) have long been a popular source for convenient, low cost meals. These factors are increasingly important to consumers facing financial hardships due to loss of income from COVID-19. Contact-less delivery and low wait times are also important to these consumers. One of the easiest ways for restaurants to meet these needs is to utilize alternate forms of food delivery: drive-thru service, curbside pick-up and home delivery.

Getting Creative

Because many local and state governments have forced restaurants and bars to cease all dine-in services due to COVID-19, quick service-restaurants with drive-thru capabilities have seen increased traffic and demand from consumers. For recognizable brands that have a strong drive-thru system in place, a decline in dine-in customers has been met with a strong upsurge in drive-thru orders. These businesses are utilizing their drive-thru lanes to limit crowd size and enforce social distancing rules while continuing to serve customers. However, only about 20 percent of quick-service restaurants in operation today have drive-thru service.

Many restaurants that do not have drive-thru windows are now offering curbside pick-up. Home delivery services like Grubhub, DoorDash and Uber Eats have partnered with many independent and national restaurants to offer discounted—and in some cases free—delivery and commission fees. Other restaurants are creating home preparation kits of some of their most popular menu items, while others are offering frozen and prepackaged goods.

Case Study: Taco Bell

Leading quick-service restaurant brand Taco Bell has set the bar for enhanced restaurant safety via its Seven Enhanced Safety Steps across all of its 7,000 U.S. restaurants. These new protocols will include contact-less service and payment; employee temperature checks; extra sanitation options for customers; and much more. These safety protocols will undoubtedly be adopted and implemented in various ways throughout the QSR sector.

In addition to its enhanced safety guidelines, Taco Bell is offering customers the chance to recreate their favorite Taco Bell dishes in the comfort and safety of their own homes. For a limited time, the At Home Taco Bar will be available for patrons via delivery and contact-less drive-thrus nationwide. This new menu offering is an easy, safe way to feed a party of six for only $25. Additionally, Taco Bell is rolling out a series of recipe cards that will feature classic recipes from the Taco Bell Test Kitchen, along with recipes for Taco Bell-inspired cocktails.

On The Market

Ground + Space is a leading commercial real estate firm that specializes in single-tenant and retail NNN investments. We have two outstanding QSR assets on the market right now. Our McDonald’s listing is a prominent outparcel that sits along an ever-expanding retail corridor in California, Maryland, and our Taco Bell listing is a rare triple-net (NNN) asset within the New York metropolitan area. Our team is committed to providing up-to-date information and best-in-class services to clients during the COVID-19 pandemic and beyond. The market changes daily, so please contact one of our brokers for specialized guidance during this time.

Stay Informed

The Centers for Disease Control and Prevention (CDC) offers daily updates and other information about COVID-19 symptoms and testing in the United States. Johns Hopkins University (JHU) has created a resource to help inform the public and advance comprehensive understanding of the novel coronavirus and its effects backed by experts in global public health, infectious disease and emergency preparedness. Additionally, the World Health Organization (WHO) continues to track the number and location of confirmed cases of the virus across the globe.