The golden ticket for Calgary’s fast food restaurants? A drive-thru

On May 17, real estate group JLL released its spring retail outlook for Calgary, a report which provides a snapshot of the commercial rent landscape across the city.

The report noted that while leasing activity in the downtown core has not rebounded to pre-pandemic levels, one market area has – commercial rents for fast-food restaurants, particularly in the city’s suburbs.

Grant Kosowan, president of Orange Group Commercial Real Estate, said this is especially true for spaces that have drive-thrus.

An appetite for low-contact dining driven by the COVID-19 pandemic, coupled with what Kosowan calls a “challenging” local market, has magnified the intense competition over drive-thrus that he said has existed in the city for decades.

“It has always been very difficult for fast food and quick service restaurants to secure space in the Calgary market,” Kosowan said.

“It’s especially acute in drive thru scenarios… So that has driven the [rental] price of drive-thrus in Calgary through the roof. “

From a business perspective, Kosowan said having a drive-thru can make or break a restaurant’s sales. But in his 20 years of experience, he said the city has restricted their construction.

“Try getting multiple drive-thrus through the development department at the City of Calgary. You have a better chance at winning the lottery.”

Kosowan said this is because city council has deemed drive-thrus something not in Calgarian’s best interest, although he admits this is up for interpretation.

“They want things that they deem appropriate for the Calgary market, whether it be bike lanes or this, that or the other.”

Beyond convenience

Christina Gail is a mother to a two-year-old and has a physical disability. She said that drive-thrus are not just a convenient option – in some circumstances, they’re a life-saver.

As a parent, Gail said she always chooses to use a drive-thru over waking her toddler up from a nap to go into a restaurant.

She added that the service is also invaluable from a disability standpoint.

“I know a friend who was in a wheelchair for a while and even though they can get in and out of the car by themselves, in order for them to do that and then get their wheelchair out and everything, like it’s such a hassle, said Gail.

Gail said that while she has several drive-thrus in her northwest neighborhood, she’s noticed there are fewer options in the city’s newer developments, particularly in the southeast where she often goes to visit family.

“If you are down by the hospital in Seton or Auburn Bay, the only Tim Hortons there is one that you have to walk into. If I’m going down there and I know that I need to get a coffee, I’m going to stop before. “

According to a 2018 report by the University of AlbertaCalgary enacted a partial ban of drive-thrus in 2007 through the adoption of a new land use bylaw.

In a statement to CBC News, a spokesperson for the city’s Community Planning department said the bylaw dictates the extent to which drive-thrus are allowed in a certain parts of the city.

“We have many commercial districts where drive thrus are allowed, and we have some commercial districts where they are not listed as a potential use,” said the statement.

“Districts that do not include drive thrus as a use are typically pedestrian-oriented districts.”

Data sent to CBC News by the Community Planning department shows that only one new drive-thru permit has been issued so far this year, down from 12 permit approvals in 2019.

Scott Lockwood, a manager with the department, said the city has no strategy to limit drive-thru use in the city, or in new developments.

“If people are seeing fewer [drive-thrus]I can not honestly speak to why that would be. “

Lockwood said the city does try to limit the implementation of drive-thrus in areas where walkability, density and transit are a priority.

“What we do in new communities is we try to figure out the best spots to put [drive-thrus]. We’re not going to put a drive-thru in the middle of a residential neighborhood. We’re going to have the drive-thru in a location where there are other commercial services. “

A shift in service

The success of drive-thrus evidenced by restaurant sales, said Kosowan, is not unlike other ways in which the pandemic has changed the way the food-service industry does business.

According to Restaurants Canada, an industry advocacy group, food establishments across the country are seeking to add multiple drive-thru lanes to ease bottlenecks, with dedicated lanes for delivery drivers.

Kris Hans, an instructor at Mount Royal University, said he thinks the flexible options driven by COVID-19 are here to stay.

“Especially with the pandemic, I would say that everything’s been accelerated in terms of changes,” said Hans.

“If it wasn’t for drive-thrus the pandemic probably would have impacted restaurants even more so.”

Hans noted that it’s not just drive-thrus that have gained new popularity, but other methods of mobile ordering.

“If you go to McDonald’s or A&W, or what have you, you can pre-order using the app and then from there you can just wait in your spot,” said Hans.

“I think at the end of the day, people want flexibility.”

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