What Does 75% Off-Premise Mean for a Restaurant Space?

Nearly 75% of all restaurant traffic now happens off-premise — takeout, drive-thru and delivery. Takeout is the most common of the three, then drive-thru, then delivery.

That is a leasing problem before it is a restaurant problem. Most restaurant space in this country was planned around a dining room, and three out of four orders never reach it.

It is not a pandemic hangover

Off-premise now accounts for a larger share of sales for 58% of limited-service operators and 41% of full-service operators than it did in 2019.

The behavior did not revert. Roughly two-thirds of Gen Z consumers describe takeout as essential to how they eat, and more than 60% of consumers say they order off-premise more often than they did a year ago.

Plan a space for 2019 dining patterns and you are planning for a customer who stopped showing up.

Tenants are already modifying what you leased them

30% of full-service operators have made changes to their parking lots to accommodate off-premise orders.

That is the number worth sitting with. It is the point where an industry trend becomes a physical alteration to somebody's property — usually after the lease was signed, usually by a tenant with a contractor and a problem, and usually without the landlord having planned for it.

What changes in the space itself

Kitchen-to-dining ratio. A restaurant doing most of its volume to go needs more production and less seating. The same sales come out of a different footprint, and the square footage a tenant asks for may be smaller than the category's historical average.

Pickup flow. A takeout customer should not cross the host stand, the bar or a server's path. That means a dedicated counter, ideally near the entrance, and shelving or lockers for completed orders. Retrofitting this into a dining room designed without it is expensive and usually ugly.

Parking turnover. A dine-in guest occupies a space for 60 to 90 minutes. A pickup customer occupies one for three. Those are different parking problems, and a center whose ratio was calculated on dine-in dwell times may be fine on paper and chaotic in practice at 6pm.

Door placement and wayfinding. A delivery driver who cannot find the entrance in 30 seconds becomes a one-star review for food that was fine. Signage, lighting and a visible door matter more than they used to.

Curb access. Designated short-term spaces near the door, or a curbside zone. This is the modification operators are making themselves.

What it means for the mix

Off-premise changes who a restaurant's neighbors should be.

A tenant whose customers arrive, wait four minutes and leave is not drawing anyone onto the sidewalk. If a center fills with high-turnover off-premise concepts, it generates car trips rather than foot traffic, and the retailers around them lose the spillover they were counting on.

That is not an argument against leasing to them. It is an argument for knowing which of your tenants produce dwell time and which produce transactions, before you assume one kind of traffic substitutes for the other.

Ask what share of their sales is off-premise before you walk them through the space.

The answer changes which space is right. A concept at 70% off-premise does not need your best dining-room frontage, and it may be much better served by a smaller unit with good parking access than by the larger one you were hoping to fill.

It also tells you what the buildout will cost them, which tells you what rent they can carry.

Understanding Retailers covers how retailers make money, how to read the numbers they give you, and what each category actually needs in a space.

Source: National Restaurant Association