The restaurant real estate market has been a bit messy as of late, to say the least. Demand is high. Inventory – especially for table stakes drive-thru locations – is low. Costs are astronomical. Construction, supplies, permits are painfully slow. As Portillo’s CEO Michael Osanloo described during his company’s most recent earnings call, “It’s sort of whatever the military acronym is for SNAFU – Situation Normal All Messed Up. We continue to face delays in all kinds of last-minute things. I think we have reconciled ourselves to this is a new normal.”
Still, concepts that survived or thrived through the pandemic are itching to grow and most have dry powder to do so. As such, we’re starting to catch some glimpses of how they’re adjusting their strategies to navigate the "new normal" – from a bigger focus on conversions to smaller buildouts to the creation of value engineering programs to good, old-fashioned patience. Chipotle has even started calling cities to “make sure Chipotle is at the top of their work list.”
For more on this story and how restaurants are navigating the market, we turn to Alicia Kelso.