Jack in the Box Acquisition Shows Value, Power of Drive-Thrus

Jack in the Box is going all in on drive-thrus. The San Diego, California-based quick service restaurant (QSR) chain, which has over 2,200 restaurants across the United States and Guam, announced Monday (Dec. 6) that it is acquiring Taco Bell competitor Del Taco, highlighting in the release that 99% of the Mexican-style QSR chain’s roughly 600 restaurants have a drive-thru.

“This is a natural combination of two like-minded, challenger brands with outstanding growth opportunities. Together, Jack in the Box and Del Taco will benefit from a stronger financial model, gaining greater scale to invest in digital and technology capabilities, and unit growth for both brands,” Jack in the Box CEO Darin Harris said in a statement. “This acquisition fits squarely in our strategic pillars and helps us create new opportunities for the franchisees, team members and guests of both brands.”

The Context

The acquisition comes at a time when many brands are looking to the future of the drive-thru channel. Chipotle has been opening new drive-thru locations throughout 2021, and on Wednesday (Dec. 1), Muncie, Indiana’s Star Press reported that a new Chipotle restaurant in the city would feature a drive-thru exclusively for digital orders.

Moreover, on a call with analysts sin late October, Starbucks’ COO noted that the mix of the combined drive-thru and mobile order and pay (MOP) channel was up 15% from before the pandemic, accounting for 70% of sales. Meanwhile, Burger King is streamlining menus to speed up drive-thru times, and Shake Shack has just opened its first drive-thru location.

See also: Quick-Service Restaurants Aim to Bring the ‘Quick’ Back to the Drive-Thru

By the Numbers

According to data from PYMNTS’ 2021 Restaurant Readiness Index, created in collaboration with Paytronix, restaurants’ customers are even more likely than managers to value the drive-thru channel. The study found that 40% of consumers report believing that the ability to pick up orders at the drive-thru will be important to restaurants’ future success, compared to just 26% of managers.

Read more: QSRs’ Lagging Loyalty-Reward Investment Hurts Innovation and Sales

Additionally, the Index finds that restaurants with drive-thrus are more likely to be successful. Fifty-seven percent of top-performing restaurants offer the ability to pick up orders at the drive-thru, while only 16% of bottom performers did the same.

What Insiders are Saying

“We investigated drive-thrus a few years ago — we were surprised how antiquated they were. They’ve been operating the same way for 30, 40 years. There’s really been no innovation,” Rajat Suri, founder and CEO of restaurant voice, vision and touch technology company Presto and co-founder of Lyft, told PYMNTS in a recent interview. “So I think drive-thrus are going to become a lot faster, a lot more personalized, where you’ll have a chance to opt in to be recognized every time you go, and you’ll have a burger made exactly the way you like it, and they’re going to need a lot less labor to run efficiently.”

You may also like: Drive-Thrus Get a Long-Overdue Tech Upgrade for the 2020s

On the flip side, brands that do not digitize will be left struggling, Chipotle Chief Restaurant Officer Scott Boatwright predicted to PYMNTS’ Karen Webster, reflecting on the success of the brand’s Chipotlanes.

“We now consider that that digital drive-thru of the future,” he said. “And I know there are a lot of brands today that are larger that have your traditional drive-thru experience that are entrenched … and I think they’re going to struggle.”

Related news: Chipotle Moves Beyond The Burrito To Connect Consumers With New Experiences