U.S. Fast-Food Chains Are in No Hurry to Reopen Dining Rooms

(Bloomberg) -- While some U.S. states have given the green light for restaurants to reopen their dining rooms, McDonald’s and other fast-food restaurants are in no big rush to do so.

That’s because there’s a lot of effort and expense involved in preventing the spread of the coronavirus, as exemplified by the McDonald’s step-by-step guide on everything from adding protective panels to sanitizing tables after every use. Franchisees say this will require hiring more staff.

Tracy Johnstone, who owns seven McDonald’s restaurants in Florida, isn’t opening her dining rooms yet even though the state now allows it.

“We are not running a hard timeline,” Johnstone said. She’s letting employees and supervisors have input into reopening decisions, and will do so “when they are ready and when we feel good about it.”

She also needs to make sure she has properly trained staff in place to be ready for sit-down customers. In the coming weeks, she’s looking to expand her current workforce of roughly 300 people by 20%.

Booming Takeout

The recent success of drive-thrus and takeout helps to relieve some of the pressure to reopen too quickly. These options, combined with slimmed-down menus, have been enough for many restaurants to get by, since this means they can operate with smaller crews and fewer ingredients. For some chains, including Jack in the Box Inc. and Raising Cane’s Chicken Fingers, sales are actually up compared with pre-crisis levels.

“We’re doing plenty of drive-thrus -- it’s our safest way to keep our customers and team safe,” said Raising Cane’s founder and Chief Executive Officer Todd Graves. “Restaurants have to be really careful.”

Despite being able to open dining rooms in Georgia and Texas, the 500-store chain is opting to keep them closed. “We’re just waiting,” he said. “It’s just prudent for us to do that.”

U.S. Fast-Food Chains Are in No Hurry to Reopen Dining Rooms

The industry’s sales were hammered in late March and April. But sales likely bottomed out last month, and will improve in May as Americans with cabin fever start to re-emerge, said Bloomberg Intelligence analyst Michael Halen. Establishments that specialize in takeout and delivery are seeing this trend.

Drive-thrus are also more profitable for restaurants right now, especially when customers are ordering for the entire family. For Jack in the Box, which historically does about 70% of its business through the drive-thru, opening dining rooms will be a “less efficient transaction,” CEO Lenny Comma said on an earnings call Thursday. “There’s a lot of efficiency right now through the drive-thru.”

For the California-based burger and taco chain, sales have been rising steadily in recent weeks and were up 8% for the week ended May 10.

‘Extremely Conscientious’

Dickey’s Barbecue Pit Inc. has also reported a return to positive sales recently. The chain has opened one-fifth of its restaurants in eight states. Though it could open more of its roughly 500 locations, it says it’s being “extremely conscientious in opening dining rooms” and is working with each restaurant to make sure the time is right. In the meantime, those locations are still doing carryout and delivery.

For many restaurants, it’s just not worth the headache of reopening dining areas, which now require extra staff for cleaning and guiding customers through lines while observing social distancing.

Employees’ safety is another concern. Raising Cane’s Graves, for example, would like to see infection rates come down before opening dine-in again.

“I’ve just got to feel real good about it. I employ people’s kids,” he said. “It’s important and we’re going to reemerge -- I can wait a couple weeks.”

©2020 Bloomberg L.P.

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