Wrapped Up In Chains
Parkland Memorial Hospital in Dallas operates a level-one trauma center, a violence intervention program, a palliative care department--and a McDonald's. Shoppers at Super Target can pick up kitchen appliances, toys and a Personal Pan Pizza from Pizza Hut. Forget where you parked your car? No problem. The Foley's parking garage in downtown Houston houses a Subway.
Quick-service chain restaurants once lined America's highways. Nowadays they also inhabit gas stations, airports, schools, athletic clubs, military bases and even a laundry.
"Everybody's looking for new markets for growth," explains Annie Smith, spokeswoman for Subway, "not only in new countries but new opportunities within the larger markets." Americans drop $376 billion-plus on restaurants annually, and quick-service chains battle for a hefty chunk of that dough, about $114 billion last year alone. At the same time, however, research studies document America's shrinking lunch periods and ever-increasing workweek. In one recent survey, 53 percent of adults listed convenience as a critical factor at mealtime.
Thus the trend toward placing restaurants in nontraditional settings.
"Traditional sites dry up," Ron Gorodesky, president of Restaurant Advisory Services in Lafayette Hill, Pennsylvania, says bluntly. "Nontraditional locations can be successful if the core channels of business are already developed," agrees a more eloquent Tom Tucker, national sales manager for Tricon Express Restaurants, owners of Pizza Hut, et al. Chain restaurants require instant brand recognition for life, and as main street sites fill up, they must scramble to find new and visible locations.
"We don't want to miss any opportunity," admits Clark Elms, real estate director for McDonald's. "When you look at Parkland, there are at least 6,000 employees plus thousands of other people in the hospital. It's a captive market, and most of them can't leave." Indeed, with Big Macs registering an artery-clogging 31 grams of fat and 1,070 milligrams of sodium, most of them may be back in the hospital soon enough anyway.
According to food-service industry experts, the trend toward putting fast-food chains in nontraditional spots began in the early 1990s. Taco Bell, for example, launched its express version in 1991. McDonald's began flipping ready-made pre-packaged burgers at Parkland in 1989. "Hospitals are very popular sites right now," Gorodesky says, "also gas stations, supermarkets, anywhere you have people on the move." In practice this means pinpointing anywhere people with wads of cash or plastic in their pockets stop and take a brief look around. "The premise was to bring our food to the people at a convenient place for them," says Laurie Gannon, spokeswoman for Taco Bell. A convenient place means anywhere hordes of people congregate. Pizza Hut operates at the Fort Worth zoo. Little Caesar's partnered with Kmart, while McDonald's occupies space in Wal-Mart. "Quick-service restaurants can go into a gas station or retail outlet or other environment and be successful because they're looking for foot traffic," says Gorodesky. Wal-Mart employs almost 1 million people nationwide. That's roughly 2 million feet and a million mouths.
"We used to be so impressed at the drive-through," says a nostalgic Tracey Evers, executive director of the Greater Dallas Restaurant Association, "but now that's not fast enough." Indeed, the restaurateurs nationwide expect chains to grab even more market share in the future, largely through expansion into nontraditional settings and multiple-branding--those Taco-KFC-Huts.
"We co-brand for different reasons," Elms explains. "We may co-brand because a particular site is too expensive." Instead of KFC buying an acre of land, the restaurant formerly known as Kentucky Fried Chicken splits the cost with two other brands. They can then purchase more real estate for less. The fastest way for President W to despoil America's parks and wildlife preserves, it would seem, is to offer up land to quick-service restaurants. This would also solve any looming oil crisis.
Now if we could only discover a way to fuel SUVs with grease drippings from a Personal Pan Pizza.
Airports provide fast-food chains with a perfect nontraditional venue. Throughout the previous decade, America's air carriers cut back drastically on in-flight food service. In 1999, for example, Delta limited meal offerings to either snacks or beverages on more than 200 flights. Quick-service restaurateurs saw this as a perfect opportunity, moving in to take advantage of the millions trapped in terminals each week waiting out the inevitable delays. National chains from T.G.I. Friday's to Burger King expanded into the airport market. McDonald's operated five restaurants in DFW alone.
Yet nontraditional sites offer unique challenges. "A smaller footprint is required for a nontraditional location," Tucker points out. "We adjust the menu for the specific venue." Other restaurant chains eschew the trend, trading the image of ubiquity for that old-fashioned Main Street appeal. In other words, branding against the grain. "We operate a few airport locations which are very successful," says Sue Hoover of Quizno's. "Other than that, we tend to look for central business districts tied to a daytime population." Not everyone is enamored with the voracious fast-food land grab. "A lot of commercial real estate developers are looking for sit-down restaurants to occupy their space," Evers says, hinting that slower-paced table-service establishments address quality of life and image concerns.
Still, the spread of nontraditional restaurant settings suggests that national chains know just what the public will accept. Subway runs more than 3,000 restaurants--including stores located in groceries, naval bases and schools. Taco Bell operates about 2,000 express locations. "They've done very well for us," Gannon says. "At gas stations, for example, people will buy a taco or burrito instead of snacks."
Today Texaco, tomorrow the world.
Industry observers expect continued expansion of fast-food chains. In fact, Elms even finds it difficult to separate traditional sites from the kudzu-like express sites. "We operate in malls, we may have a cart at a Nascar race, or a co-branded division," he says. "How do you want to define nontraditional?" Branding, visibility, foot traffic--national chains live or die on this stuff, and their voracious appetites drive them deeper into our lives. Outback Steakhouse opened an outlet in a Houston high school. Pizza Hut, Taco Bell, Subway and others occasionally pop up in schools as well, although Deborah Owens, director of food operations and compliance for the Dallas Independent School District, believes that "kids get just as tired of that as they do of regular campus food." Hmm. A dull and oily Salisbury steak or a big taco salad. Yeah, she has a point.
"I think we've only scratched the surface for nontraditional settings," Gorodesky says. "In the near future even department stores will have quick-service. You'll see tremendous proliferation."
If we haven't already.
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