Fri, 06 Aug 2021

Digital ordering soars for fast-food chains during lockdowns

Robert Besser
06 May 2021, 01:47 GMT+10

NEW YORK, New York: With take-out ordering remaining consumers' preferred choice for dining, fast-food chains, including McDonald's, Taco Bell and Chipotle, will work to take away an even larger chunk of the market share from sit-down restaurants.

For the 12 months ending in March, fast-food chains dominated the restaurant market taking in 70.2 percent of dollars spent eating out and 82.9 percent of all restaurant traffic, according to data from The NPD Group.

McDonald's said that its first-quarter U.S. comparable sales jumped 13.6 percent, noting that it had 40 million active app users in its six largest markets, half of them in the United States. McDonald's plans to launch a loyalty program in the United States this year to attract even more customers.

To drive both ordering via social media platforms and marketing with artificial intelligence, Taco Bell and KFC parent Yum Brands will put into use tech acquisitions in the final quarter of the year. Chipotle Mexican Grill still plans to open 200 new restaurants this year, 70 percent of which will have digital drive-thru lanes.

During the year ending in March, Americans spent nearly $281.6 billion on fast food which gained 7.1 percent of market share in dollars that full-service restaurants shed, the NPD data shows.

Fast food "is going to be the bright spot in the restaurant space for a long time to come," NPD analyst David Portalatin said, as quoted in Reuters, noting that it was gaining market share even before the pandemic.

Bloomin' Brands Inc, which said Thursday that it plans to expand its 750 sit-down Outback Steakhouse locations to 1,000, said that it grew its digital ordering 147 percent over last year.

However, independent restaurants could not step up digital operations as quickly. The National Restaurant Association estimates that 110,000 restaurants closed permanently in 2020, and many fast-food outlets report that their seating areas remain shuttered.

"With 90 percent-plus of our business being through the drive-thru, if we can sustain that and return our dining rooms and takeaway to the levels that they were pre-pandemic, we've set ourselves up for a very good run here," said Joe Erlinger, head of McDonald's U.S. operations, on a call with analysts Thursday.

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