Drive-thrus are worth 40% more than mall stores for Burger King in South Africa – at least until the economy turns

Business Insider SA

Burger King's 80th restaurant in South Africa, at Kolonnade Retail Park.
  • Burger King just opened its 80th restaurant in South Africa, five years after it launched in this country. It is a drive-thru.
  • Less than half its current stores are drive-thrus – but that balance will change soon.
  • Drive-thru locations are worth about 40% more business than in-mall stores, the chain says – at least until the economy improves.

The 80th Burger King restaurant just opened in South Africa, at the Kolonnade Retail Park in Tshwane, and is a drive-thru. That makes it part of a minority of the chain's stores – but that is about to change. Burger King is opening about 20 stores a year, and most of its future locations will be drive-thrus.

"A drive-thru does about 40% higher revenue than other locations, in food courts and malls," said Burger King SA chairperson Hassen Adams.

Drive-thrus have another advantage, Burger King SA has found. A new drive-thru outside a shopping mall will not detract from an outlet in the food court of the same mall.

"The turnover is incremental to the location," said Adams. "The drive-thru customers aren't the same as those on foot."

Mall stores do better business over lunch, drive-thrus get busy in the evening as people head home and pick up dinner along the way.

Those kind of advantages outweigh the amount of time it takes to build a drive-thru restaurant from scratch, with planning permission and construction taking 12 months, if everything goes smoothly, said the chain's chief operating officer Juan Klopper. By contrast, a food court location in a mall can be fitted out and operational in three weeks flat, under ideal conditions.

But in five years in South Africa, Burger King has never seen the kind of economic boom that typically boosts consumer spending on fast food. And that could change the equation dramatically.

Drive-thrus are defensive in bad economic times, the chain believes; people in cars have more spending money on average than people on foot. In better times, however, malls may attract more people, a greater number of whom may reach deeper into their pockets for burgers.

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