In March 2000, Sonic took something of a risk. Under Claudia San Pedro, who had been named president of the burger chain in 2018, the company decided to shift away from its popular “Two Guys” commercial and instead shifted to one focusing on the moments customers can have in their cars while eating Sonic.
But the timing would turn out to be fortuitous. Shortly after the debut of the new round of commercials, which featured real customers enjoying real life moments eating Sonic in their cars, the world was hit with a pandemic that would change how consumers used restaurants.
For much of 2020, in other words, the car would be the place people could have a good time. As COVID-19 spread and dining rooms were closed or restricted, gatherings took place behind the wheel. Those ads reminded customers of that benefit.
The result for Sonic was one of the best years in company history: U.S. system sales soared 21% to $5.7 billion. It leapfrogged both Panera Bread and Pizza Hut to become the 11th largest restaurant chain in the U.S., according to the Technomic Top 500 Restaurant Chain Report. Even in a year in which burger chains did well, thanks to strong takeout strategies and drive-thrus, Sonic’s performance stood out.
“We could never have seen this kind of year,” Sonic President Claudia San Pedro said in an interview. “When we’re all disconnected and spent our lives not being with the people you like, you could have someone bring you food and have that kindness.”
Indeed, she said, the company’s carhops provided a level of service customers weren’t receiving last year. “We received so many comments from carhops on their friendliness,” San Pedro said. “It was not just a transaction, but people connecting and appreciating the connection.”
10 Largest Burger Chains
Source: Technomic Top 500 Chain Restaurant Report
Consumers did eat a lot more burgers last year. The 10 largest limited-service burger chains averaged 2.7% system sales growth despite the pandemic last year, and the burger chains in the Top 100 averaged 1.2%. While those numbers may not seem like much, they were in 2020.
In addition to companies like Sonic that generated strong growth were concepts like Culver’s, whose system sales rose 10.6%, Freddy’s Frozen Custard, whose sales rose 20% and the stalwart In-N-Out Burger, whose sales soared 9.5%.
Among the most notable moves in this segment came at the top, however, where Wendy’s—long the third-largest burger chain in the U.S., moved past Burger King to take the No. 2 spot behind the behemoth McDonald’s.
Cars have definitely been a place of comfort for consumers—the market research firm Researchscape last year, for instance, found that 30% of Americans would drive around their neighborhood for a mini-break during the day while 16% sat in their cars listening to audio books or music. Consumers clearly ate in their cars, too, lining up at drive-thrus and filling Sonic’s drive-ins.
Sonic’s U.S. system sales
Source: Technomic Top 500 Chain Restaurant Report
The 3,500-unit chain has been focused on implementing technology that would give customers options while not taking away from the service provided by those carhops.
Order ahead has worked well for the chain, enabling customers to choose their orders and customize them and then pick how they want to get the food, either in one of the chain’s stalls or through the drive-thru.
Customers, San Pedro said, rediscovered the chain by using its newfound convenience. “The convenience of being able to order off lot, pick where I can get my food, customize my food—we have a variety theme—and when I get on the lot I don’t have to wait in line,” she said. “I get into any stall, insert the number and get the food I ordered in a most frequent way and in a contactless manner.”
“We give people choices,” she added. “The guest always control their choices, how they want to order, what they want on their food, what they want on their drinks. If you’re by yourself in the stall, it’s OK to be by yourself and eat in your car. It’s socially acceptable and almost celebrated.”
But the drive-ins, she said, facilitated celebrations even while enabling that contactless service—which helped fuel the chain’s sales last year.
Sonic is not just a pandemic phenomenon, however. System sales increase 5% in 2019, according to Technomic. That was more than double the average rate of growth from the previous 12 years. The company has been working on that technology for some time. It also used innovation effectively, with the Twisted Texan Cheeseburger, a Strawberry Cheesecake Blast and others.
It has worked to improve employees’ experience and is now working to give customers the option to leave tips for their carhops—one of the biggest customer requests during the pandemic, San Pedro said.
The challenge for Sonic going forward is to maintain this momentum. Many chains have picked up sales in recent months and casual dining concepts are on an incredible trajectory. It no longer has a monopoly on families’ social gatherings.
Yet San Pedro has an answer. This summer will be about celebrating outside, and Sonic gives customers the option to do that. “We’re definitely going to do things this summer that we didn’t feel comfortable doing last summer,” she said. “That’s another wonderful way people will be able to connect and have that eating experience.”
The chain will also build on its order ahead capabilities while working to build new flavor news on its more snackable options. The company also views delivery as a possible sales channel—one it did not take advantage of during the pandemic, mostly because it didn’t have to. “We think we can continue to grow that,” she said. “Delivery as a percentage of sales will grow.”
San Pedro also believes that the pandemic gave the company an advantage by instructing customers outside of the chain’s more Southern core markets on how to use the concept. This is especially important in Northern markets where the chain has not been as successful. “We were still educating new guests on the value and relevance of that drive-in format,” she said. “The pandemic helped accelerate that understanding. ‘I get it now.’
“Sitting in the car with family is actually pretty fund. They’re understanding the value of the drive-in format as an experience.”
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