Full-service restaurants around the country have been opening dining rooms as COVID-19 infections decrease and more people are vaccinated.
Quick-service restaurants haven’t been so fast. But that is changing, and the nation’s biggest restaurant chain by sales expects to keep opening more dining rooms over the summer.
Chris Kempczinski, McDonald’s CEO, said on Thursday that he expects his chain to open more dining rooms over the next several months.
“We’re certainly working and looking at local changes as those are being announced and more people get vaccinated,” he said at the company’s annual meeting. “I’m confident that over the next several months we’re going to be able to start opening up more and more of our dining rooms.”
To be sure, other chains have been quicker to reopen their dining rooms. Wendy’s CEO Todd Penegor told investors earlier this month that 85% of the burger chain's dining rooms are open.
Fast-food chains have always had a high percentage of takeout sales, thanks to their drive-thrus, and that was growing going into the pandemic. The drive-thru alone often generates two-thirds of a fast-food chain’s sales, for instance.
When states closed dining rooms a year ago, those drive-thrus proved beneficial and many operators boasted of improved profits from running their restaurants for that single window.
Many chains have generated strong sales even as they’ve kept their dining rooms closed. That includes McDonald’s, which saw same-store sales rise 13.5% over 2019 levels in the first quarter despite having most of its dining areas shut.
That has diminished chains’ need to reopen dining rooms. A shortage of labor has also diminished the incentive for operators to allow indoor seating.
At the same time, the restaurants built dining rooms for a reason and many executives believe that they’ll gradually get more business from inside customers as people are vaccinated and the pandemic continues to wane.
“We are seeing, when we do reopen dining rooms, even in the U.S., that consumers are ready to come back to visit in the dining rooms and have money to spend,” McDonald’s CFO Kevin Ozan said last month.
That said, the customers are only coming in gradually. Penegor said that Wendy’s restaurants with dining rooms open are getting 10% of their sales through those areas. That’s “a long ways away from where we were pre-COVID at about one-third of our mix being through the dining room,” he said.
And, he added, half of the dining room customers are taking their food with them. Penegor said the company expects dining room use “to continue to build as more folks get vaccinated, and we start to get to the other side of the pandemic. But it will take a while to get back to that one-third dining room mix over time.”
Another question is whether chains can maintain the amount of takeout business they generate now while increasing business by opening dining rooms. Fast-casual chains like Noodles & Co., and Chipotle Mexican Grill have said their digital sales have been “sticky” after they reopened dining rooms.
Chipotle CEO Brian Niccol told investors last month, according to a transcript on the financial services site Sentieo, that his chain’s digital sales “are now slightly above the COVID peak from last year while we’ve recovered 60% of in-restaurant sales as dining rooms reopened.”
The drive-thru is a different animal, however. But fast-food executives are hopeful they can keep drive-thru sales even with dining rooms open. “With 90% plus of our business being through the drive-thru, if we can sustain that and return our dining rooms and take-away to the levels that they were pre-pandemic, we’ve set ourselves up for a very good run here,” Joe Erlinger, president of McDonald’s USA, told investors.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.