QSRs Cash In on Night Owls

More quick-service restaurant visits are happening at night. McDonald’s and Wendy’s reported a surge in late-night sales from the first quarter to the second. At Jack in The Box, 19.2% of second-quarter sales happened between 10 p.m. and 4 a.m., compared with 16.1% in the fourth quarter, according to Placer.ai. At Taco Bell, 15.2% of second-quarter sales happened during late-night hours, up from 12.6% in the fourth quarter.  At Burger King, late-night hours claimed 5.2% of sales during the second quarter, up from 4.1% in the fourth quarter.

QSRs typically see an increase in late-night visits during the summer, according to Placer.ai and other sources cited in Restaurant Dive. But some chains also attribute the growth to increased spending on late-night advertising, expanded hours and partnerships with delivery services. To accommodate third-party delivery traffic and mobile orders, many are adding lanes and pickup spots for these orders.

Why Have a Drive-Thru Window When You Can Have a Drive-Thru Door?

Day or night, automatic sliding doors are helping quick-service restaurants adapt to consumer behaviors and serve more customers. On a recent webinar called Elevating Drive-Thru Design; Transforming Food Service Experiences, HFA hospitality architect Steven Baker noted that service at a drive-thru window comes to a halt until the first vehicle in line gets its order. If a door replaces the window, a car whose order is taking longer can pull into designated spot and an employee can deliver it when ready without going through the front of the house.

5 Restaurant Truths Playing Out in the News

Consumers Are Developing a Taste for Mediterranean

During the second quarter, its first quarter as a public company, Cava Group opened 16 restaurants, bringing its portfolio to 279 units. Sales at units that had been open for at least one year climbed 18.2%, each unit averaging $2.6 million in annual sales. The company plans to open 65 to 70 locations this year and to grow its count by at least 15% a year for the next several years, including its first Chicago-area restaurant, set to open in 2024 in the planned Crossroads of Schaumburg, which will replace a former Macy’s.

Same for Plant-Based Foods

Ingka Centres is launching a food hall focused on plant-based foods. Saluhall will host local vendors in 23,000 square feet across two floors at the Ikea-anchored center coming to 945 Market St. in downtown San Francisco. It will open in the first quarter and will aim for 80% of its food to be plant based.

Lunch Traffic Isn’t What It Used to Be

Veggie Grill is revamping its real estate portfolio to position itself closer to suburban residents than to office workers. In August, the plant-based, quick-service restaurant said it would close 12 locations, bringing its store count to 17.

Restaurant Sales Grew Slower in August

August sales show consumers could be cutting back on restaurant spending, according to ICSC research manager Matthew Panfel. With the exception of February, sales in U.S. restaurants rose just 0.3% from July to August, the slowest growth in five months, according to the U.S. Census Bureau. Restaurant sales have been growing steadily since the start of the year, but rising inflation and changing dining patterns have pumped the brakes recently. Meanwhile, overall retail and food service sales minus auto and gas increased 0.2% in August. Back-to-school shoppers continued to drive sales, Panfel said, as sales at apparel stores climbed 0.9% and sales at electronics store advanced 0.7%, the largest increase in three months for that category.

Sale-Leasebacks Provide Funds for Restaurants That Want to Focus on Food

11 Mall Redevelopments Around the Country

The mall field continues to winnow to the top-performing properties, but those are doing better than ever while other malls find new life with other uses.

“A combination of healthier tenants and limited quality supply is driving strong supply-demand atmosphere for mall landlords, particularly in high-barrier-to-entry markets,” PREIT CEO Joseph Coradino said on a second-quarter earnings call. His company owns 22 million square feet, mostly malls. New tenants still flock to top malls, Simon CEO David Simon confirmed. At Simon’s malls, more than 30% of lease activity in the first half of the year was new deal volume, he said on a second-quarter earnings call. And Unibail-Rodamco-Westfield, which just sold Westfield Valencia Town Center to Centennial for $199 million, may be reconsidering its previous decision to offload all 16 of its U.S. malls. The landlord even is reinvesting in some of the properties it had planned to sell, such as Westfield Century City in Los Angeles.

Many other malls are finding new life. Some are going open-air, some have been marked for demolition to make way for new uses and others are going mixed-use. Here’s a roundup of the latest activity.

Santa Ana, California: The Segerstrom family and Hines plan to demolish the 100,000-square-foot South Coast Plaza Village and build a mixed-use development with 1,583 homes, 300,000 square feet of offices, 80,000 square feet of shops and restaurants, 3.7 acres of public space, and parking for 3,520 vehicles.

Santa Clarita, California: Centennial plans to add multiple uses, including luxury residential, to the 1 million-square-foot Valencia Town Center.

Nampa, Idaho: Rhino Investments is converting 81,000 square feet of the 400,000-square-foot 1960s-era Karcher Mall into District 208, a three-building multifamily community with 252 apartments. Completion is scheduled for spring.

Topeka, Kansas: Financial services firm Advisors Excel is moving its headquarters into West Ridge Mall after purchasing the 992,000-square-foot Dillard’s and JCPenney-anchored property.

Moorhead, Minnesota: Roers Development will demolish the 235,000-square-foot former Moorhead Center Mall to make room for a mixed-use property that will include a library and community center. Construction is expected to kick off next year.

Chesterfield, Missouri: The city council rezoned the site of the 1.3 million-square-foot Chesterfield Mall from commercial to mixed-use, allowing for retail, office and more than 2,000 apartment units. Demolition of the mall, except for anchor Dillard’s, is expected to begin late next year.

Concord, New Hampshire: Namdar wants to tear down most of the 481,722-square-foot, 1990s-era Steeplegate Mall, leaving three standalone structures: a JCPenney, a trampoline park and a health club. Plans include adding five buildings totaling 625 residential units and a 173,000-square-foot, multitenant retail building.

Nashua, New Hampshire: Local officials will allow a casino to move into the 169,000-square-foot, two-level former Sears at Simon’s 979,000-square-foot Pheasant Lane Mall. The casino, a development of ECL and Clairvest, will open this year.

Cincinnati: Hull Property Group purchased the 1 million-square-foot EastGate Mall in Union Township, Ohio, and plans to work with city leaders to revitalize the Kohl’s-anchored property. Meanwhile, municipal trustees bought the former Sears at Northgate Mall for $2.2 million and plan to redevelop it into a multi-use site with multifamily and single-family residences. And nearby in Forest Park, Hillwood Construction is seeking tax incentives and zoning approval to demolish much of Forest Fair Mall to make room for new uses.