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U.S. fast-food chains cash in, seize market share during pandemic - Reuters

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People walk by Taco Bell's first digital-only U.S. cantina location at Times Square in New York City, U.S., April 14, 2021. REUTERS/Shannon Stapleton

McDonald's Corp, Taco Bell, Chipotle and other fast-food chains stand to gain yet more market share from sit-down restaurants as consumers stick with the mobile ordering habits they picked up during the pandemic.

McDonald's Corp (MCD.N) said on Thursday its first-quarter U.S. comparable sales soared 13.6% and that it had 40 million active app users in its six largest markets – half of them in the United States – as it seeks to attract even more customers through a loyalty program it expects to launch nationally this year.

Taco Bell and KFC parent Yum Brands Inc (YUM.N) plans to use tech acquisitions in the last quarter to drive both ordering via social media platforms and marketing with artificial intelligence. Chipotle Mexican Grill Inc (CMG.N) said last week that it still anticipates opening 200 new restaurants this year, 70% of which will have digital drive-thru lanes.

For the 12 months ending in March, fast-food chains dominated the restaurant market – taking in 70.2% of dollars spent eating out and 82.9% of all restaurant traffic, according to data from The NPD Group that has not previously been made public.

Drive-thrus, new crispy chicken sandwiches and "family meal" deals helped draw customers that other restaurants lost. During the year ending in March, Americans spent nearly $281.6 billion on fast food – which gained the 7.1% of market share by dollars that full-service restaurants shed, the NPD data show.

Fast food "is going to be the bright spot in the restaurant space for a long time to come," NPD analyst David Portalatin said, noting that fast food was gaining market share even before the pandemic.

To be sure, Bloomin' Brands Inc, which said Thursday that it plans to expand 750 sit-down Outback Steakhouse locations to 1,000, grew its digital ordering 147% over last year.

But many independent restaurants could not ramp up digital operations as quickly. The National Restaurant Association estimates that 110,000 restaurants closed permanently in 2020.

At many fast food outlets, seating areas remain shuttered.

"With 90%-plus of our business being through the drive-thru, if we can sustain that and return our dining rooms and takeaway to the levels that they were pre-pandemic, we've set ourselves up for a very good run here," said Joe Erlinger, head of McDonald's U.S. operations, on a call with analysts Thursday.

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