Dive Brief:

• El Pollo Loco has unveiled two “restaurant of the future” designs that focus on off-premise business and digital ordering channels, according to a press release.
• The first version includes a takeout window, dual drive-thru lanes, dedicated curbside parking spaces, patio seating and no indoor dining room. The second design includes a dual drive-thru, dedicated curbside pickup spaces and a smaller dining room that opens up to a patio through garage-style doors.
• Similar to many other chains releasing designs driven by changing customer habits during the pandemic, El Pollo Loco's new models include cubbies for mobile to-go orders, digital menu boards and a GPS-enabled curbside pickup service. These features are integrated with the chain’s mobile app. 

Dive Insight:

El Pollo Loco’s new designs reflect a larger trend happening throughout the QSR space of prioritizing off-premise channels over dining rooms. 

In the past few months alone, major players like Arby’s, KFC, Wendy’s, Taco Bell, Del Taco, Burger King and McDonald’s have unveiled models honing in mostly on the drive-thru channel. Some, like Wendy’s, have discussed models with no dining room at all. Like El Pollo Loco, Arby’s expanded its drive-thru channel into two lanes, while KFC’s Next Generation Prototype features one lane dedicated for ordering onsite and another dedicated to mobile pickups. McDonald’s is not only looking to add more dual drive-thrus to its system, but also a third drive-thru line in some stores.

The drive-thru is a focal point because the channel was particularly critical for survival at the beginning of the pandemic and continues to draw traffic. Drive-thru visits were up by 26% in that first quarter of April, May and June, which was on top of a nearly 40% growth of usage from 2018 to 2019.  McDonald’s drive-thru business jumped to almost 90% of its overall sales. The chain just recorded its strongest same-store sales gain in 10 years.

For El Pollo Loco, business is up at the chain and it's pressing the gas in response. During its Q3 earnings report in late October, CEO Bernard Acoca said, "We’re putting a disproportionate amount of our attention on that [drive-thru] channel given that we've gone from driving 45% of our business prior to the pandemic to close to 70% of it now. We think we can drive more through that channel and realize even greater sales comp upside."

That said, speed remains a priority as these chains shift to off-premise models. Speeding things up is also a priority for El Pollo Loco, with its dual drive-thru lanes and digital menu boards, the latter of which Acoca said during its Q3 earnings report “could speed things up.”

Mobile-enabled pickup and curbside should also expedite operations for the chain. Its GPS-enabled curbside was launched on Sept. 28. Customers can leverage the GPS feature by downloading the chain’s recently launched loyalty program, Loco Rewards. The feature alerts employees that the customer has arrived. According to a recent report from Bluedot and SeeLevel HX, 40% of consumers say they are using curbside more than usual.

That El Pollo Loco is tying its curbside service into its loyalty program could also provide a lift in downloads. The program was relaunched in September and has already reached over 2 million downloads. By capturing more guests on that program, El Pollo Loco will be able to create more personalized offers, learn more about their purchasing habits and potentially convert those diners into regulars.

During its Q3 earnings report, Acoca said these new brand elements, including digital pickup in the front-of-the-house, have been in the works over the last two years. In this most recent press release, Acoca added, “The future is now” and said these new designs will be a catalyst to get the company back to 5% annual new unit growth.