With its slate floors and subdued lighting, Arne Jacobsen-inspired egg-chairs and printed wall panels by French architect Philippe Avanzi, a certain lunch spot in Manhattan’s uber-hip Chelsea district fits right in with the nearby boutiques and art galleries. Less predictable is the place’s name: McDonald’s.
Late last year, the franchisee Paul Hendel became the first operator in the Golden Arches’ 14,000-unit system to adopt the “urban redesign” aesthetic—one that the burger chain had earlier used to update its locations throughout the E.U. At roughly the same time, archrival Burger King an-nounced plans to make over its 12,000 American units with an industrial look featuring corrugated metal and brick walls—all in the name of décor. Menus, prices and clientele will largely remain the same. The upshot? Expect fast-food interiors to change.
What’s going on here? Well, in large part, it’s because of Starbucks—or at least the effect that Starbucks and other so-called “fast-casual” restaurant chains have had on the QSR segment. Roughly translated, it boils down to, get hip or risk losing market share.
For decades, QSRs adopted some variation of the standard layout of fiberglass seats and mustard-colored wallpaper. The materials were cheap to buy, easy to keep clean—and who cared what the restaurants looked like? Most fast-food customers didn’t stay much longer than 15 minutes, anyway. But fast food’s strategy is changing. Not only do quick-serve chains have to hold their own against encroachment of fast-casual competitors like Chipotle and Panera (which offer nicer settings and higher-end fare for only a modest bump in the average ticket), but consumer eating habits are also getting more sophisticated. In a category whose main culinary attribute has always been “fast,” companies are increasingly catering to consumers who want to linger. Wi-Fi is a given and among other new features are laptop plugs, upholstered chairs and flatscreen TVs.
“[Fast-food operators] realize their space is outdated,” said Ilan Waisbrod, president of the New York firm Studio Gaia, which counts McDonald’s among its clients. “They’re changing the space to be more like a casual restaurant where it’s not just about food; it’s about people sitting down and enjoying it.”
It’s also about the recession. At a time when corporate belt tightening has curtailed spending on traditional advertising, fast-food chains are realizing that cool furnishings can function as real marketing. “Many restaurant operators are looking for an interior design that is a ‘commercial’ for their brand, an image that reaches out to their customers,” said Rich Best, national programs manager for Milwaukee-based Interior Systems (also being contracted by McDonald’s).
McDonald’s has stated that it will spend $1 billion this year in remodeling its company-owned restaurants, though spokesperson Danya Proud points out that consumers should not expect to see the proliferation of Jetsons-like design currently on view in the Chelsea unit. “While some of the remodeled locations will have elements of NYC’s ‘urban redesign,’ that is a look uniquely suited to Manhattan,” she said. “There will be various designs implemented, not just one.”
No doubt, cost is a factor in how far the decorators will be allowed to do their thing, and it’s also no coincidence that McDonald’s’ plans include company-owned locations. Because the bill for retrofits generally falls on the balance sheet of franchisees, it has been historically difficult for large, franchised systems to get their operator communities to commit to overhauls. It’s unclear how this issue will play out when it comes to the recent initiatives at the country’s No. 1 and 2 burger chains. Neil Hogan, creative director of London architects SHH, which designed McDonald’s locations in the U.K., said that his firm had wanted to create a paper-free zone in which all promotions (signage, tray liners, etc.) would appear on LCD screens. But, he said, “that’s time-intensive and expensive.”
Still, it’s clear that the fast-food operator expects solid ROI from the revamps, which Proud said will take place “at locations across the U.S. in the future.” When McDonald’s released January results, it said that while sales in the U.S. dropped slightly, in Europe they rose more than four percent, in part because of stores with “a contemporary restaurant environment.” Last October when BK announced the expansion of its redesign efforts, the company said remodeled restaurants posted sales increases of 30 percent.
That could be because higher-tech, more sophisticated social spaces aren’t so much an extra these days but are increasingly expected by guests whose ways of using public spaces are continually evolving. Media multi-tasking consumers are never far from their laptops, iPods and smartphones, and many grew up with Martha Stewart and HGTV. “Consumer expectations about interior design have increased tenfold because of their exposure to it through TV programs, books, magazines, newspaper supplements and blogs,” Hogan said.
Michael Haaren, who, as CEO of virtual careers training firm Staffcentrix, watches the increasingly mobile work habits of consumers, observes that sprucing up restaurant environments is really only the first step in an overall effort to cater to consumers who are parking it for longer in the chairs. “Starbucks sees more and more freelancers showing up in their cafes, [so it’s not] much of a stretch to see Starbucks doing more to cater to them. It’s a marketing opportunity which right now is lost.”
All those lingering customers, however, “are a liability if they sit there for hours with a single cup of black coffee,” he said.