Del Taco Restaurants Making Push Into Convenience Stores

Quick-service restaurant chain set to open several units in travel plazas, with more in development
The exterior of a Del Taco restaurant
Photograph courtesy of Del Taco

The second-biggest Mexican quick-service restaurant (QSR) concept chain in the country is making a push into convenience stores.

Van Ingram, vice president of franchise development at Lake Forest, California-based Del Taco Restaurants Inc., said the chain is getting eight to 10 inquiries per month from c-store and travel plazas.

There currently are Del Tacos 12 in c-stores and another two to open soon in travel plazas. Elsewhere, a travel plaza built a Del Taco drive-thru on a concrete pad in front of its location—and three more locations at travel plaza are under development and another currently is being built.

All these locations are in Arizona, California and Nevada.

Industry trends are spurring the increased interest in Del Tacos, Ingram said. Del Taco is second in the nation to Taco Bell among Mexican QSRs, according to data from CSP sister research arm Technomic.

Success Trifecta

“Everyone wants to have a three-pronged stool of petroleum sales, inside sales and foodservices sales, either a QSR or some other branded-type foods,” Ingram told CSP on Feb. 20. “That’s a big push in the industry.”

Del Taco also is appealing because it’s an alternative to the sea of “standard” burger, sandwich and pizza restaurants available in many c-stores and travel plazas, he said.

“Everything we’ve done is to expedite the process for the customer.”

“Our burger competitors are probably already in place,” he said. “And they [the Del Taco franchisor] may see the industry leader in place; Taco Bell may be there, and they’re looking for an alternative to go up against Taco Bell.”

Franchisors like Del Taco’s value menu along with “the simplicity of running our restaurants and the drive-through efficiency we’ve put together,” he added. And Del Taco has received positive feedback on its new prototype buildings featuring bright green and yellow neon Lights—and black accents against those bright colors.

Ingram also noted Del Taco’s enhanced drive-thru experience, critical today because it accounts for 70% of Del Taco business. That figure grows to more than 80% when orders via third-party deliveries, another 12%, are included, he said.

Fewer Steps

To get the best out of the drive-thru, Del Taco has tightened up its kitchen to make it more easily operated with fewer employees, Ingram said, with new locations featuring a redesigned layout that reduces the number of physical steps kitchen workers must take to get a product to the delivery window—and reduces the number of steps involved in making the products.

“We’ve optimized it for speed,” he said. “Everything we’ve done is to expedite the process for the customer: make sure it’s a nice, smooth performing building for them. We maximized our layout and made it convenient for customers to be able to come and get their food from our locations.”

Del Taco also has installed food lockers, built into the outer wall of the restaurant, separate from the drive-thru, for third-party drivers to pick up orders. Employees put the order in the locker from inside the store, while the delivery person accesses the order from the outside, Ingram said. The delivery person doesn’t have to enter the store to pick up the food, and their vehicles don’t add traffic to the regular drive-thru.

‘A Beautiful Thing’

“It’s a win-win for everybody,” Ingram said. “It’s a beautiful thing for the people in the drive-thru because they don’t have to get behind a large third-party delivery order, and the third-party drivers can get on to the property and get their food without having to wait in the line. Also, it allows us to increase our mobile and third-party digital orders.”

Ingram has been involved with the c-store industry since the ‘90s, “when food was starting to get added,” he said.

Today, he said, operators see the ability to leverage their entire property.

“They have to have multiple profit centers, and they’ve known that for a while,” he said. “When they look at bringing in a franchise that’s going to teach them how to do this, we have processes, systems, menu items, food purchasing. We can purchase equipment for them and take them from when they develop their site all the way to getting open and bridging that gap. Having a franchise just makes sense—that’s the benefit of franchising and that’s whether it’s me or another franchise.”

In aiming to align with today's consumer, a c-store or travel plaza can be a convenient place for third-party delivery and for people to pick up food to bring home, Ingram said.

“They build c-sources and travel plazas in convenient spots,” Ingram said. “They’re picking off great real estate. We can be another part of that three-pronged stool that allows them to have a successful property.”

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