A new Shake Shack being planned for San Diego will have a drive-thru that's rare for the popular burger chain, reflecting the latest push by U.S. restaurant companies toward de-emphasizing dining rooms even after pandemic restrictions have eased.
Building permit filings with the city show that New York-based Shake Shack plans to develop a 3,510-square-foot restaurant with a drive-thru and an outdoor patio spanning 1,122 feet at 8105 Mira Mesa Blvd. in central San Diego. Shake Shack leased space previously occupied by Souplantation, which closed its buffet-style restaurants in May 2020, according to CoStar data. Filings with the city indicate Shake Shack and the property owner plan to demolish the Souplantation building.
Company executives have said the fast-casual chain with more than 200 U.S. restaurants was experimenting with various drive-thru formats after opening its first location with that feature in late 2021 in Maple Grove, Minnesota. They said Shake Shack had at least 10 drive-thru locations in various planning stages during 2022; the company did not immediately respond to a request from CoStar News to comment on its moves so far in 2023.
Shake Shack is joining competitors ramping up services geared to pickup of food ordered online or with mobile apps, a trend that accelerated in the early days of the pandemic as customers avoided dining rooms. Companies including the fast-casual Chipotle Mexican Grill have seen success in expanding pick-up windows geared to online orders. Even full-service stalwarts like Applebee’s are experimenting with similar drive-up services.
Well before the pandemic, drive-thrus accounted for a rising share of total sales for companies including McDonald’s and Jack in the Box, as time-strapped customers increasingly avoided dining rooms, but the actions into 2023 show that chains are designing outlets as if there's no going back when it comes to smaller dining rooms.
Industry consultant Darren Tristano said the pandemic-spurred escalation of company strategies favoring off-premises sales and more cost-effective uses of interior space is now a long-term bet. Even as most COVID-19 health restrictions on dining rooms have been eased around the country, the techniques eateries adopted have proven popular with time-strapped consumers.
“In-store dining is being converted to takeout platforms where consumers can come in and pick up their orders from a shelf, which gives fast-food and fast-casual restaurants greater opportunity to serve their customers and leverage some of the unused dining room capacity,” Tristano, who is CEO of Chicago-based consulting firm Foodservice Results, told CoStar News.
“Also, younger generations are increasingly looking for off-premises options as they prefer to pick up food and eat it in the car or away from the restaurant,” Tristano said.
Smaller Restaurant Formats
Many restaurant chains are moving toward smaller restaurant formats that allow for more potential locations in a variety of settings, and they also require fewer workers.
Staffing shortages that stemmed from the pandemic are now spurring fast-service chains in particular to lean even further into the shift away from formats that require personnel to spend time cleaning and maintaining dining rooms.
Among Shake Shack formats being tested are drive-thru sites that have limited or no indoor seating, emphasizing outdoor patio dining for those who want to eat on the premises — which appears to be the format being deployed for the planned San Diego restaurant.
In Oak Lawn, Illinois, the company has a restaurant operating with just a drive-up window for food that has been pre-ordered online.
It's "not a traditional drive-thru, and we have a handful of these open and we’ll be doing more this year,” Shake Shack CEO Randy Garutti said during a January 2022 investor conference.
Shake Shack plans to have 20 to 25 drive-thrus operating by the end of 2023, according to a shareholder letter released in August 2022.