The COVID-19 pandemic has changed the ways Americans work, shop, and even eat. Dining at restaurants -- once a common indulgence -- has since become more precarious, particularly in indoor settings.
And while casual restaurants and fast food establishments have to some degree been faring better than higher-end eateries, especially due to their "grab and go" nature, they haven't been immune to the effects of the pandemic. In fact, in August 2020, Pizza Hut announced it would be closing up to 300 locations nationwide.
It's therefore not surprising to see some restaurants adapting to the circumstances in an effort to maintain customer flow and create a safe dining experience. In fact, Burger King, a Restaurant Brands International (NYSE: QSR) chain, recently announced it will be overhauling a number of its locations in response to the coronavirus outbreak. That move alone could prevent closures at a time when so many dining places are shutting their doors.
A smart move during uncertain times
In early September, Burger King revealed two new restaurant designs that offer customers a touchless experience. Specifically, these designs feature conveyor belts to deliver orders to customers so they don't have to interface with store employees, as well as outdoor seating, which health experts agree is far preferable to and safer than indoor seating. These changes come in response to an uptick in drive-thru visits, which increased by 26% in April, May, and June.
Not only are Burger King's new designs meant to promote public safety, but they're also more efficient, taking up about 60% less square footage than the chain's traditional restaurants. And of course, these new locations will support mobile orders -- another good way to maximize the concept of contactless transactions.
How will Burger King's move impact commercial landlords?
In response to the pandemic, a number of notable chain restaurants and fast-food eateries have adopted a curbside pickup model meant to encourage social distancing and create a safer environment for customers. Burger King's new designs are equally strategic at a time when indoor dining remains iffy, yet customers continue to crave comfort food and convenience.
In fact, adapting to the times could be what saves Burger King and other chains from going under during a period when restaurants are really struggling. And that's good news for commercial landlords who rely on restaurant tenants to pay rent, many of which have struggled to do so over the past six months.
Burger King's new designs are scheduled to be built in 2021, starting in Latin America, the Caribbean, and Miami, where Burger King maintains its headquarters. It will be interesting to see if more restaurants adopt a touchless model if Burger King's new approach proves successful.
Commercial landlords should hope their tenants remain open to innovation. Restaurants that don't adapt risk shutting their doors for good, and that could deal a catastrophic blow to landlords all over the country who can't afford their own financial hit.