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fast foods

Why fast foods companies are a great investment right now

Since this whole pandemic started it has changed the way eat, one of which has affected fast foods and drive thru businesses in a good way.

From recent reports, people are spending more and stocking up and are buying more food within a single order. Starbucks said it’s revenue grew over 25% with people buying multiple drinks and foods.

These trends continue with Dunkin and Dominoes with their great recent earnings report.

Drive-thrus are thriving

The shift to a “contactless” experience was a boon for a lot of chains, including McDonald’s (MCD). The company said roughly 90% of its US sales came through its drive-thru lanes and markets that have a lot of drive-thru locations are recovering faster. Chipotle (CMG) has been aggressively expanding its drive-thrus, and recently opened its 100th. Locations with Chipotlanes, as they are cleverly called, had 10% higher sales during the second quarter compared to company restaurants without them. Around 60% of its new locations planned this year will have drive-thrus. Taco Bell-owner Yum! Brands (YUM) said it served an additional 5 million cars through its drive-thrus compared to the same time a year ago.

Midday is the new morning

People might not be stopping in the early morning, but some are popping in a bit later. Starbucks said it’s seeing spikes in traffic around 9:30 am and again around 2 pm, which has led the company to move employees’ shifts toward those hours. Dunkin’ also noticed a similar trend, with sales shifting from early morning to midday between 11 am to 2 pm. Those customers are buying non-coffee drinks, such as its new selection of teas, and snacks.

Stocks we recommend looking at

  • Amergent Hospitality Group (AMHG)
  • McDonald’s (MCD)
  • Starbucks (SBUX)
  • YUM (YUM)
  • Del Taco (TACO)
  • Chipotle (CMG)
  • Wendy’s (WEN)

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