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March 19, 2025

Less Robots, More Meat: Chipotle Founder’s Big Pivot

Just over a year ago, Steve Ells, the founder of Chipotle, opened Kernel in New York City—a vegan restaurant concept featuring a large robotic arm in the kitchen to assist in food preparation.

Given Ells’s pedigree, Kernel received significant attention from news outlets, with many speculating whether it represented the beginning of widespread robotics adoption in restaurants.

However, this speculation was short-lived. A year later, Kernel closed, replaced by a sandwich shop serving roast beef and other traditional sandwich staples—essentially, more meat and fewer robots.

This pivot marks a notable shift for Ells, who just last fall described his automation-heavy restaurant as “the future for the restaurant industry.” Yet by December, Ells had expressed frustration and was already planning a reboot. The revamped concept, now called Counter Service, completely changes the original premise.

Why did Ells shift from viewing robotics as central to restaurants to abandoning the idea entirely within a year? Company COO Tom Cortese, who spoke at The Spoon’s CES Food Tech conference in January, outlined some challenges in an interview with Expedite:

The logistics of installing and maintaining a highly sensitive robot are considerable, Cortese says. Employees need to be properly trained to interact with it, and it introduces a whole new set of safety rules beyond those of a typical restaurant kitchen. Then there’s the challenge of New York real estate:

“The subsurface of some of these floors were built in 1910… now I’m bolting a sensitive piece of robotics to it, and the floor shifts over time. That really messes up a lot of things,” he says.

While Cortese didn’t explicitly mention it, another potential issue was likely the restaurant’s overtly robotic appearance. Ells himself admitted as much in a Gizmodo interview, noting he might have gone “a bit cold” with the initial concept and suggested a need to “warm things up” in future iterations. Evidently, that meant removing the giant Kuka robotic arm.

Ultimately, outside novelty concepts such as Cafe X’s robotic coffee shop, consumers appear uncomfortable with prominent industrial robotic arms dominating open kitchens in casual dining settings. Such robots seem jarring compared to purpose-built food-making robots like Sweetgreen’s Infinite Kitchen or Picnic’s pizza robot.

Ells’s decision to introduce meat to the menu also reflects broader market realities. Despite a decade-long focus on vegan and alternative proteins in food innovation, the majority of Americans remain meat-eaters. While restaurants benefit from offering vegan options, exclusively vegan establishments currently face challenges in attracting broader audiences.

By removing robots and incorporating meat into the menu, Ells is pivoting towards a more traditional concept and betting that the success of his new venture is determined by something the pioneering founder knows something about: the quality of the food itself.

July 20, 2023

Vebu Scores Deal (and Investment) With Chipotle to Trial Avocado Processing Robot

Last week, Mexican food fast-casual chain Chipotle lifted the curtain on a new avocado processing robot called the Autocado. The new prototype robot, developed in partnership with food robotics innovation studio Vebu, will slice, core, and peel avocados before human hands mash them into Chipotle’s famous avocado dip.

The robot is being trialed at the Chipotle Cultivate Center in Irvine, California. According to Chipotle, the new machine could potentially cut guacamole prep time by 50%, which they say will help restaurant staff concentrate more on customer service and hospitality.

The Autocado works by having an employee load it with a case of ripe avocados, up to 25 lbs at a time. Each avocado is then vertically oriented and moved to the processing device, where it is halved, cored, and peeled. The flesh of the fruit is gathered in a stainless-steel bowl, ready for manual mashing and seasoning.

If Chipotle decides to deploy the Autocado widely across its restaurant locations, it could save a significant amount of person-hours that the chain spends each year producing guacamole. Chipotle expects to use 4.5 million cases of avocados across its US, Canada, and Europe outlets this year, the equivalent of more than 100 million pounds of fruit. The company believes the cobotic’s precision processing could increase yield and reduce food waste, leading to significant cost savings.

For Vebu (formerly Wavemaker), the deal is a nice feather in its hat for a company best known for the Flippy burger robot. Chipotle announced they would invest in Vebu through its Cultivate Next venture fund as part of the deal. This isn’t the first robot-oriented investment for Cultivate Next, which has invested in Hyphen, a maker of automated makelines for restaurants.

You can check out the Autocado in action below.

The Chipotle Autocado Avocado Processing Robot

June 7, 2023

Robot Restaurant Concepts Have Struggled. Will Kernel Buck The Trend?

Last month, the NY Post revealed that Chipotle founder Steve Ells is plotting a comeback with an automation-heavy restaurant concept called Kernel.

According to the Post, who viewed the startup’s pitch deck, Ells plans to build a chain of restaurants that makes the food centrally in a ghost kitchen and finishes the food in small-footprint retail storefronts. The centralized production facility and the restaurants will feature a significant amount of robotics and automation to produce the food and keep the overall employee count down. According to materials reviewed by the Post, the company states that they believe “a 3-person labor model can work.”

The company has already started building its production facility in NY and plans to launch its first restaurant in NYC in the fall of 2023. Ells is funding the company for now but is looking for investors (hence the investor deck).

As I wrote yesterday, robot-restaurant concepts have often struggled. But given Ells’ experience building a hugely successful restaurant chain, it’s worth asking: Will Kernel buck the trend?

I think they just might. Here are a few reasons Kernel might have a chance at succeeding where others have failed:

Ells is a Proven Restaurant Operator

Unlike the founders of Eatsa, Spyce and Zume, Ells is a restaurant operator with a proven track record of building a restaurant brand from the ground up. During his tenure as the company’s CEO, Chipotle pioneered the fast-casual concept and had one of the most successful IPOs ever for a restaurant chain. Clearly, he knows something about building restaurant concepts.

Ells Has An Intuitive Understanding of Food Unit Economics

During the early days of Chipotle, Ells focused heavily on the unit economics of the burrito business, calculating just how many he needed to sell daily to make a profit. It’s that kind of focus on the different cost-levers that is required when forecasting the cost of building an automation-centric restaurant business that will have higher up-front capex costs but, over time, should ultimately create more efficient restaurants with lower daily operating costs, and isn’t susceptible to the high employee turnover of employees.

The Hub & Spoke Model Can Work If Done Right

Some ghost kitchens have struggled for various reasons ranging from low-quality and high costs. However, fast casual brands have shown to be a logical pairing with centralized commissary kitchens, especially in high-rent markets like NYC (where Kernel plans to open multiple locations). Chains like Fresh&Co have grown fresh-forward concepts across metro areas like NYC through centralized batch cooking of ingredients and doing final-prep in smaller footprint storefronts. If Ells can leverage automation to take on the majority of food prep and save capital to invest in a greater number of smaller stores, he might prove this model as a recipe for the future.

Don’t Build It, Rent It

While many of the early venture-funded robotic food restaurant concepts spent most of their capital building out proprietary platforms, nowadays, a restaurant builder can leverage any of the available platforms to deploy in their food production and food service workflows. One has to look no further than a small operator like Andrew Simmons to see that restaurants can be built by piecing together systems that use robotics-as-a-service payment structures, which lower the overall capex required and allows flexibility to create a workflow over time as needs change and lessons are learned. My guess is Ells is planning on leveraging systems where others have paid all the upfront cost of development, and he can be a customer who benefits from a service and maintenance agreement.

There are still many unknowns about the Kernel concept, including what automation platforms they plan to use (or create) and just what the consumer experience will be like. But if Ells shows the brand-building prowess from his Chipotle days wasn’t a fluke and can be flexible in architecting a production workflow that carries a lower upfront capex hit than early robot restaurant efforts, he may be on his way to building one of the first true robot-powered restaurant chains.

April 14, 2022

OneRare and Honeybee Burger Partner to Bring Plant-Based Food to the Metaverse

OneRare, the first dedicated food metaverse platform just announced a collaboration with LA-based Honeybee Burger to make plant-based food “more desirable, accessible and available everywhere.”

The vegan burger, founded by former Wall Street execs, is considered a mini-chain in Southern California but has grown in popularity alongside the plant-based movement and is planning to open locations in NYC and Chicago. Honeybee plans to leverage OneRare to enter the metaverse and create a virtual location accessible to anyone around the world.

It’s a good move and one that smaller restaurant groups should watch carefully; as giants like McDonald’s, Wendy’s and Chipotle unveil their proprietary “metaverse” environments that will act like virtual storefronts and communities (Wendyverse, anyone?), taking advantage of already established platforms like OneRare will be important to compete in the fast-casual dining space in the future.

Adam Weiss, CEO of Honeybee commented, “we like to think of Honeybee as an innovator, redefining the potential of vegan food in order to increase the appeal of plant-based dining globally. On the food side, that means bringing new and exciting plant-based products to our customers, including things like Nowadays chick’n nuggets…and also Akua kelp patties, which we were the first QSR to serve. This innovation extends to our business and marketing, where we were one of the first to use Regulation CF to raise funds, and now we want to be one of the first to market in the metaverse.”

For now, Honeybee will use the OneRare “foodverse” to promote plant-based food and sustainable dining and feature an NFT menu created by the vegan chain. OneRare has been busy since raising its first funding round in November 2021, announcing dozens of partnerships with food and restaurant brands along with partnerships with NFT and cryptocurrency platforms.

March 16, 2022

Chipotle Trialing a Tortilla-Making Robot Named Chippy, Eyeing Wider Rollout Later This Year

Today Chipotle announced they have launched Chippy, a tortilla-making robot.

The company is working with Miso Robotics, the company behind the Flippy fast-food robotic arm robot. As you can see below, Chippy is a slightly modified variation of Miso’s Flippy bot, only instead of flipping burgers or frying potatoes, the bot is optimized to make Chipotle’s tortilla chips.

A Look at Chippy, Chipotle's Tortilla-Making Robot

Apparently, the customization for Chippy included producing tortilla chips with varying degrees of seasoning to mimic the imperfect work product of more carbon-based life forms. “Everyone loves finding a chip with a little more salt or an extra hint of lime,” said Nevielle Panthaky, Chipotle’s Vice President of Culinary, in the release. “To ensure we didn’t lose the humanity behind our culinary experience, we trained Chippy extensively to ensure the output mirrored our current product, delivering some subtle variations in flavor that our guests expect.”

According to the release, Chipotle is currently testing Chippy at their innovation hub in Irvine, Calif., with plans to integrate Chippy into a Chipotle restaurant in Southern California later this year.

“The company is leveraging its stage-gate process to listen, test and learn from crew and guest feedback before deciding on a national implementation strategy,” the release said.

In other words, Chipotle is trialing Chippy to evaluate (and possibly prepare for) a potentially wider rollout of the robot to essentially automate the chip-making process.

If we were to predict end-of-year headlines for 2022, one of them could well be “The Year Restaurants Went All In on Robots.” Already we’ve seen news of White Castle and Pizza Hut making significant moves, and yesterday Bear confirmed numerous chains are doubling down on robotic servers. And now, we can add one of the country’s biggest fast-casual chains to the list of restaurants that are experimenting with transitioning one of the core employee functions to automation.

For Miso, the company has continued to gain momentum ever since the commercial launch of their second-generation kitchen robot last year. One reason for the embrace of their new generation robot is its flexibility. The Flippy 2, which the company first trialed at White Castle starting in September of 2020, can make all sorts of hot food, enabling the robot to be plugged into the various kitchens of different chains.

April 16, 2021

Chipotle Diverting More Than Half Its Waste, Says Latest Company Sustainability Report

Chipotle has diverted 51 percent of its waste, the company said in its 2020 Sustainability Report released this week. The QSR chain said it was able to do much of this through recycling, composting, and waste-to-energy programs.

This is the third annual sustainability report from Chipotle, and it tracks the company’s progress on sustainability goals over time. For example, diverting 2,071,583 cubic yards of waste — or over half of all its waste — was a company goal laid out in the 2018 Sustainability Report. 

Waste-diverting efforts have so far included transforming used plastic gloves into trash bags, and the Avocado Dye Line, which involves dying clothing with the pits of avocados. Caitlin Leibert, Head of Sustainability for Chipotle, noted in a statement that keeping that much waste out of the landfills was “an extraordinary achievement” for a company of that size. Chipotle currently operates more than 2,500 locations.

The 2020 Sustainability report aligns with the company’s Environmental, Social, and Governance (ESG) metric, which ties some executive compensation to annual targets around diversity and sustainability. Chipotle breaks these objectives into three categories: food and animals, people, and the environment.

Across those three categories, some results from the 2021 sustainability report include:

  • Purchasing over 31 million pounds of local produce – an investment of more than $23.3 million into local food systems
  • Donated more than $5 million to local community organizations through 26,000 fundraisers in its restaurants
  • Offered industry-leading, debt-free degrees in business for employees and recently expanded the program to include Culinary, Hospitality and Agriculture majors
  • Setting up and maintaining a composting program at 25 percent of its locations 
  • Reducing 62,582 kWh of energy, which the company says is the emissions equivalent of 10,000 passenger vehicles driven for one year or 5,300 homes powered for one year
  • Launching Real Foodprint, a digital tool that calculates the environmental impact of Chipotle ingredients
  • Upcycling 60,000 avocados for the Dye Line

In a forward to the report, Chipotle CEO Brian Niccol said “more work can always be done,” and along those lines, the report outlines future goals for the company. Among those are, converting more than 400 acres of conventional farmland to organic farmland, developing a Minority Supplier Development program, reducing overall waste by 5 percent by 2025, and piloting at least one initiative in 2021 that reduces plastic.

Chipotle is one of those chains that, thanks to a focus on digital prior to the Covid-19 pandemic, has not just pulled through but thrived during the last year. The brand is big enough at this point that its sustainability practices can help influence the entire restaurant industry,

April 3, 2021

Food Tech News: Google AI Cake, Chipotle’s Bitcoin Giveaway and Robot Food Delivery

Welcome to the first Food Tech News round-up of April! This week we have news on a cake created by Google artificial intelligence, Kiwibot hitting the streets of Santa Monica, Ember’s new travel charger, and Chipotle’s bitcoin giveaway.

Google artificial intelligence created a cake recipe in partnership with Mars Wrigley

Google Cloud engineers created a machine learning model that uses hundreds of existing baked good recipes to develop a completely new recipe. The result was a “Cakie” (a cake and cookie hybrid) and the components of what makes a cake and cookie were generated with artificial intelligence. For the partnership with Mars Wrigley UK, Maltesers (chocolate-covered malt balls) were incorporated into the recipe to create the first-ever “Maltesers AI Cake.” Google trends revealed that “sweet and salty” was a top search trend, and the cake recipe used a buttercream frosting infused with Marmite. Earlier this year, the same machine learning model was used to create two totally new baked good recipes, the “Cakie” and “Breakie”.

Kiwibot and MealMe partner for food delivery in Santa Monica

MealMe, an app that compares prices and times of food delivery services, and Kiwibot, a teleoperated robot service that delivers food, have partnered to deliver food in Santa Monica. On April 1st, the companies began delivery for Blue Plate Taco and Red O Restaurant on Ocean Ave. Kiwibot’s robots provide contactless food delivery, and so far 100k deliveries have been completed in Berkeley, Los Angeles, San Jose, Denver, Taipei, and Medellin,

Ember launches car charger to keep beverages warm on the road

Ember, the creator of the self-heating coffee mug, has created a car charger to keep Ember Travel Mugs warm all day. The Ember Travel Mug is capable of keeping a beverage warm for three hours, but now it can be plugged directly into a car charger for an all-day charge. The car charger costs $49.95 on Ember’s website.

Photo from Chipotle

Chipotle hosted a giveaway of free burritos and bitcoin

For National Burrito Day, Chipotle partnered with the founder of Coil, Stefan Thomas, to giveaway $100,000 worth of Bitcoin and $100,000 in burritos. To win, contestants had 10 chances to guess a six-digit code. The giveaway only lasted for nine hours on April 1st on BurritosOrBitcoin.com. Update: I tried, and did not win.

March 25, 2021

Chipotle Invests in Self-Driving Delivery Vehicle Company Nuro

QSR chain Chipotle announced today that it has invested in autonomous delivery vehicle startup, Nuro. The amount invested was not disclosed and according to the press announcement, Chipotle’s investment is part of Nuro’s Series C round, which was announced last November.

Chipotle has been playing the digital long game, adding features like advanced “Chipotlanes” for drive-thru customer. That shift was one reason it was able to weather the pandemic relatively well. According to today’s press release, Chipotle’s digital business grew over 174% year over year in 2020. On top of that, Chipotles also got into the ghost kitchen game last November as dining rooms remained closed thanks to COVID.

Tying these threads together, it’s not hard to see how digital ordering, high-tech drive-thrus, ghost kitchens and self-driving vehicles could all work together. An autonomous Chipotle pod pulls into a Chipotlane, a human (or conveyor belt!) puts the order in the pod, which then drives off to make the delivery. Repeat all day long.

The good thing about Nuro’s low-speed vehicles is that they travel faster and can go farther than a sidewalk robot like Starship or Kiwibot. Plus, Nuro’s technology has gotten approvals from both the federal government and the State of California. Nuro’s self-driving pods have actually been operating without human intervention for some time now.

But! Nuro’s pods are half the size of a regular car and have two compartments that can haul a week’s worth of groceries. The Nuro pod seems… excessive for carrying a burrito across town. I wonder if Chipotle will outfit its own Nuro pods with an automat-like cubby system to hold multiple orders. Or, perhaps they will initially reserve the use of Nuros for corporate catering, which bundles together a bunch of orders.

Regardless, a big QSR brand like Chipotle investing in autonomous vehicles is not just a feather in the cap (and money in the bank) for Nuro. It could help boost the overall autonomous delivery sector.

If you are curious about the future of autonomous vehicle food delivery, be sure to attend our ArticulATE food robotics virtual conference on May 18!

November 24, 2020

Survey: More Than Half of Restaurant Sales Will be Digital by 2025

Digital sales will make up more than half, or 54 percent, of all quick-service and limited-service restaurant sales by 2025, according to new survey numbers from market research firm Incisiv. That’s 70 percent higher than pre-COVID estimates, the firm notes.

That projected growth isn’t hard to understand. It’s been an all-out dumpster-fire of a year for restaurants, with hundreds of thousands of restaurants permanently shuttered and billions of dollars already lost. Currently, restaurants across the country are reverting to off-premises-only models, which lend themselves more to minimal interactions between restaurant staff and customers.

But as we saw early on in the pandemic, even limited/quick service restaurants struggled to manage the sudden influx of takeout, curbside pickup, drive-thru, and delivery order channels. Bigger brands with money to burn and existing digital strategies have obviously fared better over the last eight months than those without many tech investments in place. As of July, Chipotle had increased its digital sales by over 200 percent thanks to the brand’s pre-COVID focus in that area. Another example is Starbucks, which as publicly said 80 percent of its orders before the pandemic were already for to-go channels.

Separately, Incisiv notes that while restaurant chains are making investments in tech, they are “not necessarily addressing the highest priorities nor the solutions that will deliver the best maximum ROI across diverse customer expectations.”

It’s a point we make all the time here at The Spoon. There are seemingly endless options for businesses when it comes to tech, but they’re not all equal in terms of the value they provide to a businesses trying to serve customers quickly, safely, and with the same quality they would get in the dining room. For example, the so-called “contactless” kits that address the in-dining room experience may become a staple of the future, but they can’t exactly add value when dining rooms are shut down. On the other hand, focusing tech investments on tools that will make digital ordering and fulfillment easier and cheaper should be a priority. To that end, Incisiv’s report urges restaurants to “make enhancements in digital tech.” Those that do, according to the report, “will be better positioned should another shutdown occur.” Which, if you hadn’t noticed, is happening as we speak.

As noted above some of the bigger QSR brands are clearly leading the charge when it comes to digital sales trends, but Incisiv says there is plenty of area for both growth and improvement. Customer satisfaction actually remains low in a few key areas. Only 40 percent of survey respondents were satisified with their pickup experience; that number drops to 25 percent for delivery. Half of guests prefer paying with a mobile wallet, but fewer than 20 percent of QSRs provide expanded payment options.

The survey found that “close to 70 percent” of restaurant chains have “stated their intent” to increase investments in mobile ordering. Over the long term, digital sales are expected to dip slightly once in-dining room service is resumed with some semblance of its former days. However, the return of the dining room won’t mean the end of off-premises, not if recent developments around condensed store formats and expanded drive-thru lanes are any indication. Incisiv also notes that share of delivery sales is expected to grow 23 percent by 2025 versus a pre-COVID forecast of 15 percent.

As the report notes, if all of this holds true, it will be QSR chains making the most progress in terms of digital ordering and setting the example for the rest of the industry. 

September 9, 2020

McDonald’s Partners With Loop to Pilot Reusable Packaging

With the restaurant industry currently being reinvented with to-go-first experiences in mind, there’s cause to worry that the shift will add even more single-use cups, straws, and boxes to our already bulging landfills. So it makes for a small silver lining that McDonald’s today announced a partnership with Terracycle’s zero-waste platform Loop to pilot a reusable cup model.

The program will first be trialed at select McDonald’s in the UK in 2021. For a small deposit, customers will get a reusable Loop cup for their hot beverages. The deposit can be redeemed by returning the cup to any participating McDonald’s location, according to today’s press release. Loop will retrieve the used cups, wash them, and return them to the cycle.

As to whether this reusable cup program will make its way to the States, a McDonald’s spokesperson said, “The feedback collected through these packaging trials will help inform which options are scaled up or adopted in other countries around the world.”

Loop’s main business lets customers shop online for grocery, household, and beauty products from well-known brands, then get them delivered in packaging. Living up to the platform’s name, Loop  retrieves and cleans the empty containers once a customer is finished, and the cycle starts again. The company currently has partnerships with Häagen-Dazs, Tropicana, Nature’s Path Organic, and several well-known personal care brands. The service is available in select U.S. cities and is in the process of expanding to more places, including international locations.

The McDonald’s partnership comes at a time when the fight for a more sustainable restaurant has to co-exist alongside the fight against COVID-19. Some chains, notably Starbucks, have banned reusable cups for the time being, (understandably) citing safety concerns. But the sustainability issue can’t be put on hold for long, particularly since the increase in to-go orders could eventually equal an alarming increase in trash, too.

Whether you love big restaurant chains or fear they’ll be the only ones left after the dust from the restaurant industry upheaval settles, it’s worth acknowledging that they’re typically the ones with the deep enough pockets to invest in new forms of to-go containers. For its part, McDonald’s has already piloted other circular solutions for cups, including the Recup system in Germany and the chain’s participation in the NextGen Cup Challenge in the U.S.

Earlier this year, the company also completed construction on its first “net zero energy-designed restaurant” in Florida. At the time of that news, I wrote that billion-plus-dollar restaurant chains like McDonald’s, Chipotle, etc. are the ones that need to take the lead in writing the playbook for sustainability in the restaurant. Smaller restaurants — the ones that have managed to survive the fallout — still struggle to remain open, so it seems unreasonable right now to ask them to also reinvent the paper cup. 

McDonald’s, on the other hand, has a $4 billion off-premises business and a recent track record that’s heavy on the innovation front. Using some of those dollars and resources to create a more sustainable restaurant experience seem the next logical step. 

August 20, 2020

Taco Bell Unveils New ‘Go Mobile’ Restaurant Concept

Two big trends are a foot in the world of quick-service restaurants: orders going off-premises and major chains redesigning their store formats to better meet that demand. Taco Bell is the latest major QSR player to respond to these trends. Today, the chain announced a new restaurant concept, “Go Mobile,” that emphasizes the role of digital in the restaurant experience.

Speaking in today’s press release, Taco Bell President and Global COO Mike Grams called the new format “a completely synchronized digital experience centered around streamlining guest access points.” 

To that end, the new store format includes two drive-thru lanes, with one dedicated to customers that order via the Taco Bell mobile app. New technology integrated into the app will detect when customers arrive to pick up their order and direct them as to where they can retrieve the food. (Sidenote: the tech sounds like geofencing a la Panera, but Taco Bell’s press release did not use the term.) Go Mobile will also feature curbside pickup and “bellhops,” who will take orders via tablet in the drive-thru lane and at curbside. 

Taco Bell also notes that this new store format will be physically smaller than its normal brick-and-mortar locations, which makes sense, given the reduced dining room capacity under which restaurant operate these days. 

Other QSRs have made similar moves in the last few months. Starbucks is reformatting many of its traditional cafes to act as to-go-focused locations. Chipotle, a brand not historically known for drive-thru service, is all-in on its Chipotlanes. Shake Shack is also revamping its focus to include more drive-thrus and digital-forward experiences. Even Domino’s, which has always been an off-premises business, is revamping its format to include more curbside pickup.

Taco Bell’s first Go Mobile store is set to open in the first quarter of 2021.

Takeout, delivery, and curbside pickup are still the main formats through which these big brands can reach customers at the moment. With dining rooms still operating at reduced capacity and the future of full-service restaurants still very much uncertain, we will see more QSRs rethinking their brick-and-mortar locations to fit the off-premises style that’s become, for better or worse, the new restaurant experience. 

July 24, 2020

Black Box Intelligence: Full-Service Restaurant Sales Slumping, Off-Premises Still on the Rise

As the number of COVID-19 cases spikes in multiple states, full-service restaurant recovery has slowed, according to new data from Black Box Intelligence in a story by Nation’s Restaurant News.

Black Box, a Dallas, TX-based restaurant analytics firm, said as COVID-19 cases rise and new restrictions set in place (see California), dine-in sales at restaurants have decreased. 

Part of the reason for that is the number of restaurants actually open for dine-in service. “After a steady climb since the end of April, the percentage of restaurants existing in the pre-COVID era that are now open for dine-in has plateaued around 87% for the last three weeks,”said Black Box.

This shouldn’t surprise too much. In the last few weeks, major chains like McDonald’s have halted their reopening plans for dining rooms and some states have either reduced capacity or ordered in-house service to stop altogether. 

Also not surprising: off-premises sales are increasing for quick-service and fast-casual restaurants. Black Box said that while off-premises sales had been slowing as restaurants reopened, “that trend has now been reversed in the last three weeks.”

This new data comes on the same week Yelp released its latest Economic Average Report, which found that 60 percent of businesses that have closed are now shuttered permanently. 

None of that makes for a very positive outlook for many independent restaurants used to relying on dine-in service that don’t have the dollars of a major chain to invest in off-premises. Starbucks or Chipotle, for example, may have the bucks to pivot their models to new, to-go-friendly formats that ensure sales. The future is much less certain for your favorite mom-and-pop joint, though.

Whether sales at full-service restaurants gain momentum again depends a lot on the trajectory of the pandemic. Judging from the latest numbers around the latter, dining room sales will likely stay down for some time to come.

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