QSRs Rethink Space, Location in Post-Pandemic Times

The quick service restaurant industry (QSR) has undergone a significant transition due to the pandemic. Restaurants today are finding they can remain viable by adapting to the changing consumer behaviors and preferences with technology, sustainability, and authenticity.

Coldwell Banker Commercial’s 2024 Spring CRE Trend Report, focused on the quick service restaurant industry, found that the post-pandemic era had a dramatic effect on QSR real estate in two ways: where they locate and where they locate within a property.

For example, they no longer have as much emphasis on taking advantage of urban density — places for commuters to pick up a coffee or breakfast before work, and lunch or drinks after work in the heart of the city.

Arguably, these locations were overbuilt in central business districts (in many cities, a Starbucks on every corner wasn’t a joke, it was reality), while suburbs were neglected,” according to the report.

“This has essentially caused the center of the QSR industry to officially move away from bustling business districts toward the places where people live,” according to SafeGraph in The Big Wake-Up Call: Re-thinking the Entire Playbook for the Quick Service Restaurant Industry.

Sweetgreen, for one, noted that most of its new stores would be in the suburbs, even though the trickle of workers returning to the office is picking up.

This shift has shopping center owners and managers finding their outdoor spaces are increasing as the size of the buildings drops. It is being used to accommodate outdoor dining that was popularized during the pandemic or designated parking spaces for pickup orders.

In 2021, Juan Martinez, principal of industrial engineering company Profitality, told LoopNet that fast casual restaurants can be designed in less than 2,000 square feet, possibly with an outside seating component.

Martinez added that space must be left for people to park if they arrive before their order is ready.

Therefore, he suggested the building of an “escape lane” where customers can wait, yet another design element that must be planned by both tenant and landlord.

A greater impact has been the return and the proliferation of the drive-through, Coldwell Banker said. They provide operators the opportunity to save space, staff, and money.

For example, in 2023, Chipotle opened 121 new restaurants — 110 of which included Chipotlanes, digital pick-up locations for orders placed online.

In Atlanta, Chick-fil-A, one of the fastest-growing QSRs in the US, is opening a four-lane drive-through, with the kitchen located a level above. Meals are sent to a team member who delivers the order in a space covered by the upper floor.

Jeff Rabbitt, Partner at design firm AO, said in prepared remarks, “While drive-throughs minimize the physical size of the store, they require careful consideration of real estate for car queuing. Innovations like app-based drive-through systems, such as Chipotle’s Chipotlane, are optimizing this space.”

These systems leverage app ordering and real-time notifications to streamline the drive-through experience, reducing the required length of queuing space, he said.

“This innovation allows QSRs to operate in locations with restricted geometries that were previously considered unviable due to space constraints.”