How Chick-Fil-A’s Drive-Thru Service Boosted Visits In Q4
xAd points to Chick-Fil-A's 'personal touches' as separating it from the QSR pack. Meanwhile, the location marketplace's foot traffic monitoring suggests a comeback for Chipotle.
Chick-Fil-A appears to be capitalizing on its 6-month-old mobile app as well as emphasizing something as old-fashioned as “face-to-face” personal service, as store visits were up 2.6 percent from Q3 to Q4.
In its its latest QSR Foot Trends report, location marketplace xAd also pointed to Chick-Fil-A’s continued expansion in the northeast and midwest regions. And despite some lingering consumer doubts in cities due to the company’s occasional conservative political stances, Chick-Fil-A has won over diners by personal service and, simply, the sense that it’s food may be “fast,” but the quality is assured as well.
Chick-Fil-A’s Q4 boost — which also may represent a seasonal shift — ultimately speaks to the way omnichannel efforts can amplify a brand’s perceived value in other areas. The QSR, which has over 1,500 store locations, began to expand its digital touchpoints in tandem with its northeast and midwest rollout to reach on-the-go consumers in June. The company’s mobile app immediately rose to the top spot in Apple’s App Store.
“Chick-fil-A has seen a lot of success in recent years,” Sarah Ohle, xAd’s senior director, insights & innovation, tells GeoMarketing. “Their growth has been noted in industry reports and also reflected in our foot traffic data.
“The quarter-over-quarter foot traffic increase for the brand lead us to look at what they’re doing differently than some of the other QSR leaders in the space,” Ohle adds.
“One of the most notable differences is their focus on customer service. In an industry characterized by quick grab-and-go transactions, Chick-fil-A stands out for the sheer politeness of their staff,” Ohle notes. “Rapid geographic expansion could also possibly be driving some of this. The Georgia-headquartered brand has been opening several stores in the North and Midwest, making their food available to a whole new set of consumers.”
A Comeback For Chipotle
Overall, Chick-Fil-A garnered 7 percent of all QSR foot traffic in Q4, tying it with Burger King and Taco Bell. The only brands ahead of Chick-Fil-A were McDonald’s, which remains the king of QSR foot traffic with a 30 percent share, was followed by Starbucks at 12 percent and Subway at 9 percent.
While Chipotle was at the bottom of the list with just a 2 percent share of QSR store visits in Q4, xAd notes that the embattled brand is experiencing something of a comeback.
Chipotle, which has 1,900 outlets, appears to be finally seeing an incremental return of customers following a health scare that erupted after a food-borne illness outbreak that began about 2 years ago.
“Chipotle has definitely been making a comeback over the past year,” Ohle says. “xAd noted several milestones for the brand in previous quarterly trend reports. One of their most successful tactics was the free burrito promotion earlier in 2016, which gave the brand a bump in foot traffic for all of Q2 and put them in a position for growth for the rest of the year.
“Although it’s hard to say for certain from foot traffic analysis how much of an impact the loyalty program had, in our data we’ve seen that peak visitation shifted from dinnertime to noon, indicating that much of their growth could have come from the working crowd returning to the restaurant for lunch,” Ohle says.
Chipotle finished the year strong with same-store sales rising by 14.7 percent in December, xAd notes. The company plans to keep winning customers back in 2017 through innovations such as enhanced online ordering and an expanded menu, including the possibility of introducing dessert items.
McDonald’s Tech Turn
At the other end of the spectrum, it looks like McDonald’s all-day breakfast menu may be losing momentum. Foot traffic through the Golden Arches was down 1.4 percent during Q4.
As we noted previously, McDonald’s same-store sales in the U.S. dipped 1.3 percent in Q4 as the QSR faced increased competition upscale rivals like Shake Shack and Chick-Fil-A, as well as direct competitors like Taco Bell and White Castle, and emerging challenges like on-demand pre-ordering and delivery.
When asked about plans to reverse those negative trends, McDonald’s CEO Steve Easterbrook pointed to expanded app usage. In particular, Easterbrook directly related improved customer experience to a broader array of app-based marketing and mobile pay as influencing store traffic and sales.
By the end of Q4, McDonald’s app had 18 million downloads and over 11 million of those are registered users.
McDonald’s is currently testing “ordering ahead” via either the internet or through its branded app. Easterbrook also outlined other standard omnichannel offerings, such as a test of curbside check-in, “where if you pull on to the parking lot, you can actually pull up into a dedicated bay where you can just scan your order, we can bring it out to you.”
McDonald’s is also developing more in-restaurant technology, such as the rollout of self-order kiosks, which Easterbrook described as a an opportunity to enhance customer relationship management and loyalty.
He acknowledged that “there are others who are further ahead than us, but this is one where you got to get it right. It’s better to be right than to be first to market.”
Luckily, for McDonald’s and other QSR brands, the Q1 winter season has been relatively mild. And without having to worry about bad weather depressing store visits, that should give it enough of a breather to roll out its new digital offerings and figure out what will entice consumers beyond all-day breakfast.
A Word About Foot Traffic Growth
In terms of visitation gains, Q4 appeared to be a challenging time for Dunkin Donuts, KFC, and Subway, as well as McDonald’s. But Ohle cautions that the changes in foot traffic gains also reflects the maturity of certain brands, which constrains how far there is to grow.
“It’s important to note that just because share of foot traffic changes, that doesn’t mean that volume of QSR visits or visits to any specific brand is declining,” Ohle notes. “McDonald’s and Subway are currently two of the leaders when it comes to share of QSR foot traffic. As smaller brands grow in popularity, this growth may shift share away from some of the industry leaders. In other words, it doesn’t necessarily mean that McDonald’s is seeing fewer total visits, it could just mean that a brand like Panera is seeing more.
“That said, seasonality definitely has an impact on QSR visitation patterns overall. The weather this year has been especially harsh and this may have affected some brands more than others based on their geographic footprint,” Ohle says. “For example, Dunkin Donuts is a favorite in the Northeast where there have been several cold fronts and snowstorms already this winter. Compare that to a brand like Chick-fil-A with a large southern footprint and it could explain some of the changes that we see in share of foot traffic in the winter months.”