The curious surge of productivity in U.S. restaurants(bfi.uchicago.edu)
bfi.uchicago.edu
The curious surge of productivity in U.S. restaurants
https://bfi.uchicago.edu/working-papers/the-curious-surge-of-productivity-in-u-s-restaurants/
279 comments
Several fast food restaurants in my town tried to keep their dining rooms closed well beyond the health emergency. They were reminded by the town that their business licenses depended on them having dine in service. If they wanted to be drive thru and pick up only, they'd need to convert to a different business license, including a new traffic study and payment of road impact fees. They reopened the dining rooms instead. A couple of Taco Bell locations tried to game this by having dining room hours that they didn't honor. Not sure if someone complained to the town or Taco Bell corporate but one day the dining room hours suddenly expanded and AFAIK, were no longer unreliable.
Reminds me; I have a SERIOUS gripe about restaurants closing before their posted hours end.
I respect the need to have a 'last order' time, and __if they don't list it__ , it isn't unreasonable to assume that's the final time on the door. What if I want to walk in for takeout because I HATE using the drive through? (I do hate that, far less consistent food, no chance to verify it's made right.)
I do respect restaurants that list a separate 'final order' time and 'everyone should be out' time, that's good communication.
I respect the need to have a 'last order' time, and __if they don't list it__ , it isn't unreasonable to assume that's the final time on the door. What if I want to walk in for takeout because I HATE using the drive through? (I do hate that, far less consistent food, no chance to verify it's made right.)
I do respect restaurants that list a separate 'final order' time and 'everyone should be out' time, that's good communication.
In India, these are called "cloud kitchens." A single cloud kitchen could be listed on a food delivery app under multiple brands - one brand for chinese cuisine, one for italian, etc.
It's 'ghost kitchen' in the US, but that's not what gp is describing.
Might also be influenced by CloudKitchens, a company founded by the Uber guy. I’ve heard them called both tho.
There are 'cloud kitchens' im California that have 30 to 40 "kitchens" at the same address, different apps. The largest on just has a double stove and cooks meat, side by side as the most kitchy vegitarian meals. The two roast beef sandwiches cost less than the salad, but the delivery driver could not hand us the food on premises. We walked outside and we're handed the meals. ( The vegitarian salad was in a separate bag ).
Interesting.
In many industries there are contract manufacturers that produce products for many different brands.
In many industries there are contract manufacturers that produce products for many different brands.
Dark kitchens in the UK.
Hmm, did they lower their price correspondingly, at least compared to competition?
Because I don't go to restaurants to just eat, albeit fine food, I go for whole experience, environment. Something clicks in each human brain and we have this bubble of different vibes, for lack of better words. Plus social aspects.
Same reason alcoholics or anybody else still go to bars in droves, despite being able to just buy same alcohol in stores for fraction of the price.
That's why I pay restaurant prices for food that often costs much less in take aways or premade in stores. Michelin * are different but again the ambience is top priority there too, you won't get the star just for stellar food.
Because I don't go to restaurants to just eat, albeit fine food, I go for whole experience, environment. Something clicks in each human brain and we have this bubble of different vibes, for lack of better words. Plus social aspects.
Same reason alcoholics or anybody else still go to bars in droves, despite being able to just buy same alcohol in stores for fraction of the price.
That's why I pay restaurant prices for food that often costs much less in take aways or premade in stores. Michelin * are different but again the ambience is top priority there too, you won't get the star just for stellar food.
>Michelin * are different but again the ambience is top priority there too, you won't get the star just for stellar food.
Au contraire: >A Michelin Star is awarded for the food on the plate – nothing else. The style of a restaurant and its degree of formality or informality have no bearing whatsoever on the award.
https://guide.michelin.com/us/en/article/features/what-is-a-...
Au contraire: >A Michelin Star is awarded for the food on the plate – nothing else. The style of a restaurant and its degree of formality or informality have no bearing whatsoever on the award.
https://guide.michelin.com/us/en/article/features/what-is-a-...
Ghost restaurants, essentially. Incidentally, I wonder what Travis Kalanick and his company CloudKitchens is up to now that he doesn't run Uber anymore.
Basically it seems after expanding to >30 countries then realizing COVID growth would not continue, rationalizing operations, and figuring out the model of ghost kitchens is limited in growth potential with significant customer and platform backlash TK's been trying to automate the production side using the "former self driving team" of Uber at a Cloud Kitchen subsidiary called Lab37. https://www.lab37.us/ However, the (2023) pictures of their system show they are not very advanced, and news appears to have halted.
Why am I monitoring this? I personally spent 9 years actually doing mechatronic R&D in the food prep, packaging and logistics automation space in China with more aggressive footprint and automation goals and am currently raising for US based go to market on a far higher density platform that sidesteps the last mile delivery providers entirely. Email in profile.
Why am I monitoring this? I personally spent 9 years actually doing mechatronic R&D in the food prep, packaging and logistics automation space in China with more aggressive footprint and automation goals and am currently raising for US based go to market on a far higher density platform that sidesteps the last mile delivery providers entirely. Email in profile.
How'd that go in China? Robot-burger flipping always seemed cool. With the level of automation they otherwise employ, why isn't McDonald's doing it yet?
My understanding is that it's basically a cost benefit calculation where it would cost nearly as much or even more than a worker because of the mechanical repair cost over time and a restaurant still wouldn't be able to automate the entire production flow from take burger out of freezer -> package it up, so there isn't much benefit. Also, having all the burger variants McDonalds sells also doesn't make this easy.
Value wise, China for mechatronic R&D is awesome. There's nowhere better on earth. It's the other stuff - legals, regulatory, HR, schools, etc. that's a PITA.
Re. McD's (actually ~15 years ago I used to work with the husband of the head of Europe but never discussed the business) - don't think their risk model has 'operational efficiency' high on the agenda. Mostly risk is outsourced to franchisees. They are so big they can just move really slowly and nobody gets fired. When competitors do something, they copy it and see if it works, recent eg. CosMc's https://www.qsrmagazine.com/story/mcdonalds-unveils-cosmcs-i...
Fundamentally - are we all going to be eating from robots real soon now? Absolutely, yes. But they won't look like 'Flippy' or Creator. They'll just be infrastructure - familiar features of the public environment as common as an electrical socket, garden tap, or street sign. You'll press a button on your own device, and either the results will come to you or you'll take a short walk. Yes, that means they have to be small, highly reliable, and self-managing. Nobody (else) has this yet. We're there.
But the stock tip of this post is - current era last mile players are dead men walking. They have no means to transition to a significant position given pending commercial drone deregulation. The players set to clean up must be vertically integrated and provide both production and delivery (that's us) or have exceptional cycle time confidence and perfect autonomous drone integration with agreed standards to unknown airframes (sketchy proposition).
Re. McD's (actually ~15 years ago I used to work with the husband of the head of Europe but never discussed the business) - don't think their risk model has 'operational efficiency' high on the agenda. Mostly risk is outsourced to franchisees. They are so big they can just move really slowly and nobody gets fired. When competitors do something, they copy it and see if it works, recent eg. CosMc's https://www.qsrmagazine.com/story/mcdonalds-unveils-cosmcs-i...
Fundamentally - are we all going to be eating from robots real soon now? Absolutely, yes. But they won't look like 'Flippy' or Creator. They'll just be infrastructure - familiar features of the public environment as common as an electrical socket, garden tap, or street sign. You'll press a button on your own device, and either the results will come to you or you'll take a short walk. Yes, that means they have to be small, highly reliable, and self-managing. Nobody (else) has this yet. We're there.
But the stock tip of this post is - current era last mile players are dead men walking. They have no means to transition to a significant position given pending commercial drone deregulation. The players set to clean up must be vertically integrated and provide both production and delivery (that's us) or have exceptional cycle time confidence and perfect autonomous drone integration with agreed standards to unknown airframes (sketchy proposition).
I noticed that food became much more standardized and similar at different places, maybe they are taking a page from McDonald's book and using some kind of a centralized model, where cooks at the restaurant just microwave and plate the prepared ingredients.
This is yet another reason to stop supporting chains and go to locally owned independent restaurants. Good food made with usually more passion and care with variety and quality ingredients.
On the flip side, many bars and restaurants are throwing lots of attention to entertainment and in-person experiences.
It’s a lot easier to find in person entertainment.
It’s a lot easier to find in person entertainment.
Do you mean like Chuck E. Cheese and Dave and Buster’s?
Before when my children were too young for iPhones, they loved Buffalo Wild Wings because they gave all the kids devices to play with. I am surprised Bill Burr did not address this phenomenon at all.
https://www.youtube.com/watch?v=CuRSVUWXA0s
https://www.youtube.com/watch?v=CuRSVUWXA0s
Same with my favorite local Thai place. I still order from there ~monthly as it's great; but I miss the lunch option.
This sounds too similar not to be - Fukada?
Just look at the furniture in American restaurants - cheap, plastic, and uncomfortable, even in high priced restaurants.
I empathize with the economic predicament of restauranteurs but I'll continue to frequent establishments with better comfort features especially because the prices are high no matter where you go. Why pay $25 rushed sloppy meal when you could pay $30 for a better meal, in a better setting, and resulting in a better (earned!) tip.
I empathize with the economic predicament of restauranteurs but I'll continue to frequent establishments with better comfort features especially because the prices are high no matter where you go. Why pay $25 rushed sloppy meal when you could pay $30 for a better meal, in a better setting, and resulting in a better (earned!) tip.
>Just look at the furniture in American restaurants - cheap, plastic, and uncomfortable, even in high priced restaurants.
Seriously, where are you eating? Nothing remotely resembling "high end" anywhere near me uses plastic furniture. It's all well-padded wood. From steak restaurants to ramen to pizza, I can't name a single place I go to that's plastic other than the typical fast food joints.
Seriously, where are you eating? Nothing remotely resembling "high end" anywhere near me uses plastic furniture. It's all well-padded wood. From steak restaurants to ramen to pizza, I can't name a single place I go to that's plastic other than the typical fast food joints.
There is an in-between, log cabin themed restaurants that have wooden benches and chairs without padding. They're not fancy in any way, but they're not fast food either. Granted they're not very common.
I agree, I don't recall seeing plastic in any sit-down restaurants.
I guess we need to define sit-down restaurants. Fast-food places with sit-down available typically has plastic seating. I know that the Chick-fil-a and McDonalds in the area do.
Some of the gastropub places near me have bare wooden seating. It's part of their "charm" this thread is swooning about. It's literally just a wooden picnic table, but yeah, that's so worth that extra money.
Some of the gastropub places near me have bare wooden seating. It's part of their "charm" this thread is swooning about. It's literally just a wooden picnic table, but yeah, that's so worth that extra money.
Do we really need to define it? In America and Britain a sit down restaurant is defined as one where you are seated by a host and order via waitstaff.
I guess we do, because I am not familiar with that specific definition
What about those "sit down" places where you load up a QR code, order from that site, pay from that site, but have a server bring your food? are they still a "sit down" place?
What about those "sit down" places where you load up a QR code, order from that site, pay from that site, but have a server bring your food? are they still a "sit down" place?
Typically I don’t think we need to define when it’s fairly standard terminology. Kind of like having to define something that’s in a dictionary. Though understandable if you are not from the US. This wiki which was top of google may help you though. https://en.m.wikipedia.org/wiki/Types_of_restaurant
You may be overthinking this way too hard. It’s simply the level of service being received. There are some definite shades of gray here but throwing qr codes into the mix is pedantic. You could have fast food QR code ordering, fast casual and even sit down experiences. The QR code does not really factor too much into it.
You may be overthinking this way too hard. It’s simply the level of service being received. There are some definite shades of gray here but throwing qr codes into the mix is pedantic. You could have fast food QR code ordering, fast casual and even sit down experiences. The QR code does not really factor too much into it.
Most would say no I'd guess in the US.
To me "sit down" implies you are seated by a host and waited on.
To me "sit down" implies you are seated by a host and waited on.
So a sit-down restaurant was a sit-down restaurant pre-COVID, then became not a sit-down restaurant during COVID just because the style of waiting/serving became different. That's a tilted definition
You seem to be trying to pick at words needlessly. Why does Covid matter now?
Because the same restaurant was considered a sit down joint and then it wasn’t because a QR code was used instead of whatever this requirement of needing a waiter to take your order. Do you not see how ridiculous that is. You came in, ordered food, someone cooked it, they brought it to you, you ate it while sitting down. You might have even ordered drinks too. You might have even done that with friends or family. How is that not a sit down place? Your definition is trivial and not really useful, but sure, it’s me needlessly being picky with words
What are you even going on about? QR codes make no real difference. Though in America I have not seen many great implementations and I would guess many would be fast food or fast casual. It’s the level of service being provided. It implies you are spending time eating with a level of service being provided. Weird
Fun fact, there's no N in restaurateur: https://www.ciachef.edu/blog/what-happened-to-the-n-in-resta...
>restauranteurs
>Plural form of restauranteur
>noun
>Alternative form of restaurateur.
odd
>Plural form of restauranteur
>noun
>Alternative form of restaurateur.
odd
The timing is perfect for drone delivery to make a big impact here. Meals could arrive fast enough to stay hot, so the quality of the food goes up while reducing delivery times too.
I don't get why companies can't figure out how to make this profitable.
I don't get why companies can't figure out how to make this profitable.
Because drones are noisy and irritating in reality and nobody wants them flying around their neighborhood and they don’t scale and they can potentially scare animals and and and…
And they can't press buttons in the elevator. I don't think any delivery service will take off in a city if people have to leave their apartments.
This is very much location/culture dependent. Where I live is customary for the delivery drivers to wait on the sidewalk while you go down to pick the order up.
Chinese delivery robots have been using elevators for years. I believe they wirelessly communicate with the elevator control system.
This explains how elevators can always be hacked remotely by the Impossible Missions Force and other cinematic superteams.
>I believe they wirelessly communicate with the elevator control system.
That sounds hilariously abusable.
That sounds hilariously abusable.
The robots are operated by the building, for what it's worth. The delivery drivers drop the deliveries off to the robots in the lobby, and the robots take it from there to the individual rooms.
That actually sounds a lot better.
You do understand this single fact undermines your previous claim completely?
Maybe we will end up with a mix of drones for places where we can reach by air, and robot operators to deliver other packages when human interfaces are what you have to deal with.
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Uhhhh, balconies?
Reach out of an open window like a reverse drive-through?
Reach out of an open window like a reverse drive-through?
I think you'd have to have nerves of steel as a company to try either of those maneuvers. The wind can be unpredictable so close to a structure, it is a cramped environment filled with objects and materials you can't predict, even a meal for 2 can be kindof bulky (doubly so bc it has to be packed well enough to be airworthy), the load might shift internally, and if you screw up there's a good chance a drone goes plummeting 20 stories down onto a crowded sidewalk.
Alright hear me out, a drone "cannon" that shoots the food onto the balcony. It's perfect for covering that last distance. Works best for food packaged in discrete boxes. ;)
How are they going to get the right apartment, and even if they do, what if the food gets fumbled in the handover and someone is injured by falling meals?
DJI has those smart docking stations.
Maybe eventually each apartment will have one or it'll be subsidized by delivery platforms.
Maybe eventually each apartment will have one or it'll be subsidized by delivery platforms.
Food slides? Smart waiters? Hook and cook? And a large orange drink?
Pneumatic tubes
But only for burritos. Pizza's not quite as resilient.
I'm disappointed society hasn't revisited pneumatic tube networks since we got good at packet switching and RFIDs and computing in general.
They're still used pretty heavily in hospitals and they do take advantage of newer technology like RFID for routing.
Separately, there's a very cool startup called Pipedream that does autonomous underground delivery robots that are kind of the next iteration of the concept.
Separately, there's a very cool startup called Pipedream that does autonomous underground delivery robots that are kind of the next iteration of the concept.
"We add a $70 surcharge to each delivery for the ballistic parachute system that protects people on the sidewalk from fumbled delivery handovers. This surcharge is refunded when the intact and unused parachute system is returned via the drone from your next delivery."
How do you shoot that used delivery parachute back to the drone upon next delivery?
This reminds me of The Fifth Element. The restaurant should fly to my balcony and serve me there.
I can't tell if this is sarcasm, because it sounds almost exactly like how a horse rider would have described new-fangled automobiles.
Well were their wrong? Car-centric development has been an absolute disaster in dozens of different ways.
those disasters were externalities, which i dont disagree is disheartening, but the personal freedoms and transportation capability given by the personal automobile is worth it. Public transport, even good ones, does not provide this level of comfort and freedom.
Oh god we're going to get a new hellscape of drone noise which we won't be able to get rid of on account of the personal freedom granted by having second rate food delivered five minutes faster.
> hellscape of drone noise
on the other hand, if it removed some traffic noise which is equal or worse than drone noises...
on the other hand, if it removed some traffic noise which is equal or worse than drone noises...
Cities don't work like that. When you have less traffic, people start to squeeze in (real estate is rarely a limiting factor), and you get more people and more traffic. People want to live densely, and they will.
My, if only there was a better way to transport people in a city besides a 2-ton metal box moved my exploding fuel...
Perhaps some two-wheeled contraption, of the pedal-power sort?
Perhaps some two-wheeled contraption, of the pedal-power sort?
Really good public transport does, because you're not constrained by having to return to your personal vehicle at the end of whatever you're doing, you're not constrained by its operational or mechanical limits (think: family members who can't drive for reasons of health or young/old age, large groups who won't fit in your car, drinking or other intoxicants that make you unfit, reading a book/resting your brain on the way to or from a long day, households not wanting or affording to own as many vehicles as there are people in their home).
OK, it's not as private or comfortable as your own vehicle, but I'd rather be in public but able to read/dream/listen than in private but having to concentrate on the road. (This of course requires a public transport system which is safe and not full of crazies, I understand that's a problem in those US cities which have it).
Granted, there's only a few dozen cities in the world that do it that well.
OK, it's not as private or comfortable as your own vehicle, but I'd rather be in public but able to read/dream/listen than in private but having to concentrate on the road. (This of course requires a public transport system which is safe and not full of crazies, I understand that's a problem in those US cities which have it).
Granted, there's only a few dozen cities in the world that do it that well.
Surely horse-centric was a lot better.
Some people seem to think manure is cleaner than tailpipes.
Reminds me of an Indian ceremony where they believe cow manure is healthy (maybe it is, I have no clue) and they are walking on it on barefeet or something.
Balony express?
I can relate with most of what you said, but "drones don't scale", really? If they can scale in war, I can't see why they would not scale for other uses
They don't have to land safely, not cause liabilities or make return trips in war.
in war, they do not need to care about collateral damage.
I sure hope that my neighbour's drone delivery doesn't produce collateral damage if it flew near my property. Otherwise, i will have to shoot down the drone.
I sure hope that my neighbour's drone delivery doesn't produce collateral damage if it flew near my property. Otherwise, i will have to shoot down the drone.
Drones were banned from cities already a good while ago, and I don't see that changing. Drone delivery could work on the countryside, but urban areas will be limited to delivery robots on wheels.
I guess you could pack all the meals in a truck, drive it to the edge of the city and then load all the drones and send them out over the burbs
Good luck getting permission to fly drones within X miles of an airport.
This seems really stupid.
A restaurant sells two basic categories of product: food/drink, and service. Labor is expended on both.
They’re ignoring service and only looking at food/drink. The split between these two products has shifted away from service. That means more labor is going into the thing they’re actually counting and less is going into the thing they’re ignoring. Wow, productivity went up!
It’s interesting that the industry has shifted to more takeout, but framing it as “surge of productivity” is ridiculous.
A restaurant sells two basic categories of product: food/drink, and service. Labor is expended on both.
They’re ignoring service and only looking at food/drink. The split between these two products has shifted away from service. That means more labor is going into the thing they’re actually counting and less is going into the thing they’re ignoring. Wow, productivity went up!
It’s interesting that the industry has shifted to more takeout, but framing it as “surge of productivity” is ridiculous.
If you read the paper, they explicitly define "productivity" as real sales per employee. Your point about service versus food would be valid except that, apparently, they weren't being paid well for the service, because real sales went up per employee as a function of reduced dwell time. That means that service was a low productivity offering.
That you can explain the increase in productivity by shift in mix from low-productivity to high-productivity products is, in fact, the entire point of the paper, and does not mean that a "surge in productivity" did not happen.
The authors point out that a change in consumer demand preferences is in fact a type of "technology" in that it can be a driver of sector productivity. Not all technology lives on circuit boards!
That you can explain the increase in productivity by shift in mix from low-productivity to high-productivity products is, in fact, the entire point of the paper, and does not mean that a "surge in productivity" did not happen.
The authors point out that a change in consumer demand preferences is in fact a type of "technology" in that it can be a driver of sector productivity. Not all technology lives on circuit boards!
In the US, service is paid almost entirely from tips. The word “tip” doesn’t occur anywhere in their paper so I’m not optimistic that they accounted for this.
Another effect they're glossing over is inflation. They're measuring real labor productivity ((dollars generated / inflation) / hours worked), but usually the way you measure inflation in that equation is to plug in some society-wide metric like the CPI or GDP deflator. By most accounts restaurant inflation has gone up more than overall CPI inflation; at least, I'm spending $120 on a meal that would've cost $80 pre-pandemic, yet official CPI inflation over this time period has been only about 23%. If you use that formula naively, it looks like the earnings of the restaurant sector have increased (which, technically speaking, they have relative to the rest of the economy), but it's really because you're paying more for the same service than you did before.
No, they're not glossing over inflation, because they were able to explain nearly the entire difference in real sales per employee between restaurants during the same time as a function of dwell time.
They are not just looking at an overall increase in sales, misunderstanding sector-specific inflation, and saying it must be dwell time.
It's a good paper! I would encourage reading it. They have specific dwell time data per location, along with sales data, and explain the difference in productivity by looking at differences in productivity between restaurants over the same time period, find that it is determined by changes in dwell time, and then find that the overall mix shift of reduced dwell time explains the overall change in real sales per employee across the sector. Inflation is not the explanation.
They are not just looking at an overall increase in sales, misunderstanding sector-specific inflation, and saying it must be dwell time.
It's a good paper! I would encourage reading it. They have specific dwell time data per location, along with sales data, and explain the difference in productivity by looking at differences in productivity between restaurants over the same time period, find that it is determined by changes in dwell time, and then find that the overall mix shift of reduced dwell time explains the overall change in real sales per employee across the sector. Inflation is not the explanation.
Yeah, Marketplace on NPR covered this yesterday and came to essentially the same conclusion.
It's not that productivity is genuinely up, it's that modern restaurants are providing a different product.
Takeout/delivery to eat on your couch has different economics than a full service restaurant. Phrasing it as productivity is disingenuous.
It's not that productivity is genuinely up, it's that modern restaurants are providing a different product.
Takeout/delivery to eat on your couch has different economics than a full service restaurant. Phrasing it as productivity is disingenuous.
Nit: Marketplace is an APM show--essentially a competitor of NPR. "NPR" has just become shorthand for "public radio."
Also Marketplace airs on NPR stations. I have Windows on a Dell, and I hear Marketplace on NPR.
Marketplace airs on stations that might happen to also air NPR. It's more like dual booting Windows and Linux on your Dell that has a Windows sticker on it.
APM and NPR are both syndicated content, but it's not quite the same.
The local stations mostly call themselves NPR stations (NPR member stations) and they explicitly include NPR branding (ex - right in the logo for mine: https://www.wabe.org/) and pay membership dues to NPR in addition to content licensing.
APM also has its own set of stations, but the list is much smaller. Plus - basically the only content from APM on my NPR station is Marketplace.
It's "NPR" for all intents and purposes. It's not dual booting, it's like a linux machine running WINE for a single application.
The local stations mostly call themselves NPR stations (NPR member stations) and they explicitly include NPR branding (ex - right in the logo for mine: https://www.wabe.org/) and pay membership dues to NPR in addition to content licensing.
APM also has its own set of stations, but the list is much smaller. Plus - basically the only content from APM on my NPR station is Marketplace.
It's "NPR" for all intents and purposes. It's not dual booting, it's like a linux machine running WINE for a single application.
Marketplace is aired on my local NPR station (WABE). APM is syndicated and broadcast on several different channels.
I happen to listen to Marketplace on NPR, not Marketplace by NPR.
I happen to listen to Marketplace on NPR, not Marketplace by NPR.
> the industry has shifted to more takeout
Last night I went to a nice (formerly nice?) restaurant. Someone had brought their dog, their children crawled around my feet and one listened to an iPad on moderate to high volume.
I ordered my drink twice, and it never came, my side dish was ordered twice too, and eventually came.
I abandoned movie theatres for similar reasons. Maybe it’s time to abandon restaurants.
Last night I went to a nice (formerly nice?) restaurant. Someone had brought their dog, their children crawled around my feet and one listened to an iPad on moderate to high volume.
I ordered my drink twice, and it never came, my side dish was ordered twice too, and eventually came.
I abandoned movie theatres for similar reasons. Maybe it’s time to abandon restaurants.
What it's really saying is we need a better metric now that front and back of house have decoupled.
Simple.
The overhead on takeout is far less than dine-in although the menu items cost the same. Dine-in costs include base waitstaff salary and workman's comp, cleaning crew and dishwashers, electricity, insurance, ect.. while takeout requires the very small cost of packaging. Something that always bugs me is restaurants that charge $2 or $5 surcharge for takeout. I'm saving the restaurant a ton of money by not using the dining room, why would they discourage that?
> It cannot be explained by economies of scale
I disagree. Increase in takeout is an increase in efficiency for each line cook and emnployee.
There was a 23 seat restaurant on the top of the hill in Pacific Grove, CA in the 90s named Taste Bisto. The chef and his wife made a fortune from that tiny restaurant. He did two things. First, he set the prices so there was always a little line waiting at the door, not too long, and he encouraged takeout with an emphasis on making the food still look presentable when the person opens the container 30 minutes later at home. According to the chef, his real profits came from the takeout. From the point of view of the grill cook, grilling 8 pork chops or 18 pork chops at. the same time isn't much different, as the cook has to stand by the grill anyhow.
The overhead on takeout is far less than dine-in although the menu items cost the same. Dine-in costs include base waitstaff salary and workman's comp, cleaning crew and dishwashers, electricity, insurance, ect.. while takeout requires the very small cost of packaging. Something that always bugs me is restaurants that charge $2 or $5 surcharge for takeout. I'm saving the restaurant a ton of money by not using the dining room, why would they discourage that?
> It cannot be explained by economies of scale
I disagree. Increase in takeout is an increase in efficiency for each line cook and emnployee.
There was a 23 seat restaurant on the top of the hill in Pacific Grove, CA in the 90s named Taste Bisto. The chef and his wife made a fortune from that tiny restaurant. He did two things. First, he set the prices so there was always a little line waiting at the door, not too long, and he encouraged takeout with an emphasis on making the food still look presentable when the person opens the container 30 minutes later at home. According to the chef, his real profits came from the takeout. From the point of view of the grill cook, grilling 8 pork chops or 18 pork chops at. the same time isn't much different, as the cook has to stand by the grill anyhow.
> Something that always bugs me is restaurants that charge $2 or $5 surcharge for takeout. I'm saving the restaurant a ton of money by not using the dining room, why would they discourage that?
My parents owned a small family restaurant in Europe when I was little. We never charged extra for takeout, but it was viewed as lower margin as dine in, largely for two reasons.
1. For takeout we usually missed out on the revenue on drinks and desserts, which have enormous margins (think multiples rather than percentages).
2. A lot of the extra labour for dine-in was internalized by the family. Now you might object that using the wife and kids as cheap labour is not an honest calculations of the margins, but with family labour you can (a) largely circumvent the tax wedge (high in Europe) and (b) the presumably undercompensated labour is ofset by higher profits which still stays in the family if the head of family is careful with money.
My parents owned a small family restaurant in Europe when I was little. We never charged extra for takeout, but it was viewed as lower margin as dine in, largely for two reasons.
1. For takeout we usually missed out on the revenue on drinks and desserts, which have enormous margins (think multiples rather than percentages).
2. A lot of the extra labour for dine-in was internalized by the family. Now you might object that using the wife and kids as cheap labour is not an honest calculations of the margins, but with family labour you can (a) largely circumvent the tax wedge (high in Europe) and (b) the presumably undercompensated labour is ofset by higher profits which still stays in the family if the head of family is careful with money.
> Something that always bugs me is restaurants that charge $2 or $5 surcharge for takeout. I'm saving the restaurant a ton of money by not using the dining room, why would they discourage that?
Take out customers rarely order drinks, which is where dine-in has high profit margins. The extra charge compensates for that.
The extra charge doesn’t discourage much because most people have already decided that they’re not dining in.
Take out customers rarely order drinks, which is where dine-in has high profit margins. The extra charge compensates for that.
The extra charge doesn’t discourage much because most people have already decided that they’re not dining in.
I linked the Cheesecake Factory 2022 report below. I asked chat-gpt for some analysis and didn't double check the math so take with grain of salt. When you take into account the largest costs for Cheesecake Factory is labor of which 50% is waitstaff and leases for prime locations, profits from on premises alcohol sales do not compare to profits from takeout.
If 11% of sales are alcohol at 20–25% of the menu price and 25% of sales are off premises at 28–35% of the menu price, what is the percentage profit from alcohol and off premises food and non-alcohol beverage, assuming they are mutually exclusive?
To break it down:
Alcohol:
Cost percentage: 20–25% Profit margin: 75–80% Profit contribution: 11% × 75–80% ≈ 8.25–8.8% of total profit
Off premises:
Cost percentage: 28–35% Profit margin: 65–72% Profit contribution: 25% × 65–72% ≈ 16.25–18% of total profit
If 11% of sales are alcohol at 20–25% of the menu price and 25% of sales are off premises at 28–35% of the menu price, what is the percentage profit from alcohol and off premises food and non-alcohol beverage, assuming they are mutually exclusive?
To break it down:
Alcohol:
Cost percentage: 20–25% Profit margin: 75–80% Profit contribution: 11% × 75–80% ≈ 8.25–8.8% of total profit
Off premises:
Cost percentage: 28–35% Profit margin: 65–72% Profit contribution: 25% × 65–72% ≈ 16.25–18% of total profit
Cheesecake Factory isn’t representative of restaurant businesses. It’s like saying restaurants should be more like McDonalds, or startups should be more like Google.
I'm using extra data to add to the original study—which found that off-premise takeout and delivery increased from 50% to 60% after the pandemic leading to higher sales per employee—to show that extra costs like lease payments, insurance, wages for waitstaff, and utilities don’t fully offset the slightly higher profit margins from selling alcohol on premise compared to selling food and non-alcoholic drinks through takeout or delivery. Using financial data, I demonstrate higher off premises takeout or delivery leads to higher sales per employee -- the same conclusion the paper we are discussing made.
Notably, the paper shows that the share of visits lasting 11–20 minutes did not drop (and even increased a bit). This indicates that the overall shorter visit times aren’t because dine-in customers are being served faster. Instead, it’s mainly due to a rise in takeout and delivery orders (takeout customers are being served slower because there are more, if you follow.) In other words, even if people wait a bit longer for their takeout, the large number of takeout orders is what lowers the average time customers spend at the restaurant which corresponds to the higher sales per employee. (If you disagree with this interpretation, please refer to the study, as that is its main argument.)
My point is that even though alcohol generally has a higher markup, the extra overhead needed to sell alcohol on premise means that its profit margins do not fully make up for those costs compared to off-premise takeout or delivery. Moreover, the data from The Cheesecake Factory, ~25% off premises takeout or deliver sale, is similar to what is seen in any traditionally dine-in U.S. restaurant, corporate or mom and pop, that isn’t Michelin starred.
Notably, the paper shows that the share of visits lasting 11–20 minutes did not drop (and even increased a bit). This indicates that the overall shorter visit times aren’t because dine-in customers are being served faster. Instead, it’s mainly due to a rise in takeout and delivery orders (takeout customers are being served slower because there are more, if you follow.) In other words, even if people wait a bit longer for their takeout, the large number of takeout orders is what lowers the average time customers spend at the restaurant which corresponds to the higher sales per employee. (If you disagree with this interpretation, please refer to the study, as that is its main argument.)
My point is that even though alcohol generally has a higher markup, the extra overhead needed to sell alcohol on premise means that its profit margins do not fully make up for those costs compared to off-premise takeout or delivery. Moreover, the data from The Cheesecake Factory, ~25% off premises takeout or deliver sale, is similar to what is seen in any traditionally dine-in U.S. restaurant, corporate or mom and pop, that isn’t Michelin starred.
> Something that always bugs me is restaurants that charge $2 or $5 surcharge for takeout. I'm saving the restaurant a ton of money by not using the dining room, why would they discourage that?
Because takeout isn't competing with the dining room. Customers don't go to a restaurant and then choose between those options; they've already planned whether to eat in or out. Restauraunts charge that because customers have shown they will pay it. Once you have that meal in mind, that $2 or $5 doesn't discourage you.
Because takeout isn't competing with the dining room. Customers don't go to a restaurant and then choose between those options; they've already planned whether to eat in or out. Restauraunts charge that because customers have shown they will pay it. Once you have that meal in mind, that $2 or $5 doesn't discourage you.
But it discourages me from ever ordering there again. There's a lot of restaurants out there. A now out of business restaurant charged the equivalent of a tip for takeout. I ate there once and just walked to the restaurant across the street that didn't charge me extra for take out.
This really seems the like 'oh duh' insight. The output of your revenue-making equipment (the kitchen) went up without requiring additional floor space and staff to serve a larger customer-base.
More specifically - the restaurants that survived (which is already a feat in and of itself) could serve more customers since they didn't have to turn as many tables. Even with the "overhead" of food delivery apps - restaurants could still purchase whole-sale ingredients in bulk and sell to more people without building out their physical plant.
To add - the dine-in experience has gotten faster. You don't need to wait for menus and you don't need to do the dance when settling your bill. Even if you didn't expand your delivery clientele you could probably turn tables faster without any 'hit' on rushing out your loyal customers.
More specifically - the restaurants that survived (which is already a feat in and of itself) could serve more customers since they didn't have to turn as many tables. Even with the "overhead" of food delivery apps - restaurants could still purchase whole-sale ingredients in bulk and sell to more people without building out their physical plant.
To add - the dine-in experience has gotten faster. You don't need to wait for menus and you don't need to do the dance when settling your bill. Even if you didn't expand your delivery clientele you could probably turn tables faster without any 'hit' on rushing out your loyal customers.
Maybe what is happening is before 2020 the people who carried the food from the kitchen to the customer were employees and after the people who carried the food from the kitchen to the customer are gig workers not employees which would explain "Figure 1. Annualized Real Sales per Employee (1992=100), Food Services and Drinking Places, Seasonally Adjusted" [0]. Restaurants now use gig workers and not employees to deliver the food. Of course, there are more sales per "employee."
[0] https://imgur.com/a/3n1ZJku
[0] https://imgur.com/a/3n1ZJku
Take out is terrible for restaurants. All the profit is in alcohol which people rarely take out. In distant second, profit comes from understaffing. So it should be obvious how and why productivity rises: in the absence of lucrative dine in drinkers, understaff. Then the denominator in the productivity calculation is smaller.
Where does the profit from subsidies go to? A few years ago, McDonalds has subsidies of $1.5B USD, and $1.5B in profits. They really are a real estate company, and nursemaids for broken ice cream machines.
McDonalds corporate and its franchises are not real estate businesses. I understand there are insight porn Substack writings saying so. The locations of a McDonalds doesn’t change but same store sales fluctuate a lot. They suck because the food sucks, and it got too expensive for its audience of people who eat shitty food. This is not at all an unorthodox opinion. The real estate idea is the unorthodox one.
I am not sure which subsidies specifically you are talking about but you are probably right that the fact that they pay their workers so poorly relative to others in hospitality, and that the services their people need are paid for by taxpayers in their communities instead of McDonalds, is a subsidy that is relevant to their bottom line. But, since I don’t know how comparable they are to SMB hospitality, it’s really hard to say. One POV is that McDonalds is the addictive thing that competes against alcohol, and maybe it has gotten less addictive, or it faces cultural headwinds like smoking did.
I am not sure which subsidies specifically you are talking about but you are probably right that the fact that they pay their workers so poorly relative to others in hospitality, and that the services their people need are paid for by taxpayers in their communities instead of McDonalds, is a subsidy that is relevant to their bottom line. But, since I don’t know how comparable they are to SMB hospitality, it’s really hard to say. One POV is that McDonalds is the addictive thing that competes against alcohol, and maybe it has gotten less addictive, or it faces cultural headwinds like smoking did.
> All of our restaurants offer a full-service bar where our entire menu is served. During fiscal 2022, alcoholic beverage sales represented 12% of The Cheesecake Factory restaurant sales. We offer all items on our menu, except alcoholic beverages where disallowed by regulation, for off-premise consumption, sales of which comprised approximately 25% of The Cheesecake Factory restaurant sales during fiscal 2022. [0]
Industry benchmarks for similar chains put food ingredients typically around 28–35% of the menu price and alcoholic beverages around 20–25% of the menu price. Nonetheless, making 2x profit on 25% of sales is incredible for restaurants.
At Cheesecake Factory, total food and beverage cost is 24.6%. Labor cost is 36.7%: of that waitstaff is ~50% of labor and kitchen staff is ~30% of labor. Operating cost is 26.7%. Looks like after other costs the profit was ~1.2%. Not much but that profit comes from the 25% off-premise consumption without alcohol.
Takeout for Michelin star restaurants is not a good idea. For almost all other restaurants, takeout is were the profits are. Engineering a menu and kitchen is like engineering a database, you have to ask things like are there a lot of writes and few reads or a lot of reads and few writes to determine how to structure it. When designing a restaurant and menu there needs to be equilibrium between how many seats in the dining room, what if any liqueur license to acquire, an expectation of percentage of food will be takeout, and menu items that will satisfy both dining room and takeout quality expectations. We eat with our eyes first even if it is opening a steaming hot carton of Orange Chicken from the Cheesecake Factory. There are always tradeoffs and it matters what the end goal is and more often than not the goal for both a database and kitchen is to earn as much profit as possible.
Some advice if you ever open a restaurant. The single biggest pain point when working in a kitchen opening a brand new restaurant is not enough storage. [1] You need enough containers to hold each of every element. You need enough containers to hold each of every element in cold storage for backup during service. Lastly, you need enough clean containers to switch the contents of each element into at the end of each night or to be dirty waiting for cleaning while the others are being used. The week before you open a restaurant, count how many containers you thought you needed and have in stock and triple that amount. Nothing will slow down service like not having enough containers. See, engineering a kitchen is like engineering a database.
[0] https://s29.q4cdn.com/187116270/files/doc_financials/2022/ar...
[1]https://www.amazon.com/Rubbermaid-Commercial-2-Size-3-Quart-...
Industry benchmarks for similar chains put food ingredients typically around 28–35% of the menu price and alcoholic beverages around 20–25% of the menu price. Nonetheless, making 2x profit on 25% of sales is incredible for restaurants.
At Cheesecake Factory, total food and beverage cost is 24.6%. Labor cost is 36.7%: of that waitstaff is ~50% of labor and kitchen staff is ~30% of labor. Operating cost is 26.7%. Looks like after other costs the profit was ~1.2%. Not much but that profit comes from the 25% off-premise consumption without alcohol.
Takeout for Michelin star restaurants is not a good idea. For almost all other restaurants, takeout is were the profits are. Engineering a menu and kitchen is like engineering a database, you have to ask things like are there a lot of writes and few reads or a lot of reads and few writes to determine how to structure it. When designing a restaurant and menu there needs to be equilibrium between how many seats in the dining room, what if any liqueur license to acquire, an expectation of percentage of food will be takeout, and menu items that will satisfy both dining room and takeout quality expectations. We eat with our eyes first even if it is opening a steaming hot carton of Orange Chicken from the Cheesecake Factory. There are always tradeoffs and it matters what the end goal is and more often than not the goal for both a database and kitchen is to earn as much profit as possible.
Some advice if you ever open a restaurant. The single biggest pain point when working in a kitchen opening a brand new restaurant is not enough storage. [1] You need enough containers to hold each of every element. You need enough containers to hold each of every element in cold storage for backup during service. Lastly, you need enough clean containers to switch the contents of each element into at the end of each night or to be dirty waiting for cleaning while the others are being used. The week before you open a restaurant, count how many containers you thought you needed and have in stock and triple that amount. Nothing will slow down service like not having enough containers. See, engineering a kitchen is like engineering a database.
[0] https://s29.q4cdn.com/187116270/files/doc_financials/2022/ar...
[1]https://www.amazon.com/Rubbermaid-Commercial-2-Size-3-Quart-...
[deleted]
> Increase in takeout is an increase in efficiency for each line cook and emnployee.
There's also a kind of precarious food-business "art" going on behind your anecdote that follows the sentence I quoted (long line, but "not too long," etc.). In your single-minded speculation about the efficiency of takeout that art isn't present.
That art is the difference between this legendary Pacific Grove restaurant on the one hand, and a "for rent" sign on a failed restaurant with a fridge full of frozen pork chops and regret on the other.
There's also a kind of precarious food-business "art" going on behind your anecdote that follows the sentence I quoted (long line, but "not too long," etc.). In your single-minded speculation about the efficiency of takeout that art isn't present.
That art is the difference between this legendary Pacific Grove restaurant on the one hand, and a "for rent" sign on a failed restaurant with a fridge full of frozen pork chops and regret on the other.
Art is one thing.
Business is another.
"You can make the best soup in the world, but if you takes all day to make it, you will never make a dollar in this business." -- German chef
Business is another.
"You can make the best soup in the world, but if you takes all day to make it, you will never make a dollar in this business." -- German chef
How much of this is the COVID-correlated normalization of delivery apps [0]? Anecdotally I do sometimes notice people eating quickly or taking out, but what I really notice is the nonstop flurry of app delivery folks darting in and out of the pickup area... Seems consistent with the study's observations, too:
> As a result, we think the growth in take-out or delivery is the primary driver of the jump in short visits. With take-out, the customer orders on their phone and then comes into the restaurant to pick it up without eating there. With delivery, the customer orders food to be delivered to their home either from a food app like Grubhub or directly from the restaurant itself as with a Domino’s Pizza. It is important to recognize that either of these things connotes a substitution of home production for restaurant labor. The customer cleans up after themselves and washes their own dishes, for example. And delivery services substitute for the customer traveling themselves. But they are still, from the restaurant’s perspective, just a new stream of demand. If the restaurant can satisfy such quick-turn customers in addition to their regular customers with the same labor force, that would show up in the data as a clear, legitimate increase in their productivity.
[0] cf. https://www.businessofapps.com/data/doordash-statistics/ https://www.businessofapps.com/data/grubhub-statistics/
> As a result, we think the growth in take-out or delivery is the primary driver of the jump in short visits. With take-out, the customer orders on their phone and then comes into the restaurant to pick it up without eating there. With delivery, the customer orders food to be delivered to their home either from a food app like Grubhub or directly from the restaurant itself as with a Domino’s Pizza. It is important to recognize that either of these things connotes a substitution of home production for restaurant labor. The customer cleans up after themselves and washes their own dishes, for example. And delivery services substitute for the customer traveling themselves. But they are still, from the restaurant’s perspective, just a new stream of demand. If the restaurant can satisfy such quick-turn customers in addition to their regular customers with the same labor force, that would show up in the data as a clear, legitimate increase in their productivity.
[0] cf. https://www.businessofapps.com/data/doordash-statistics/ https://www.businessofapps.com/data/grubhub-statistics/
What I'd like to know are the demographics of the people using the delivery apps.
Everyone I know refuses to touch them due to the massive extra costs piled on top, but whenever I swing by somewhere in-person to get takeout, I have the same experience as you - there's always at least a few bags on the "Doordash shelf" or equivalent. Who's burning all this money?!
Everyone I know refuses to touch them due to the massive extra costs piled on top, but whenever I swing by somewhere in-person to get takeout, I have the same experience as you - there's always at least a few bags on the "Doordash shelf" or equivalent. Who's burning all this money?!
I think tons of people do it. I have a cousin who moved to my town for a couple years around 2021-2023 and ordered delivery all the time. I have a friend in London who does it multiple times per week. I see a lot of food delivery happening in college-student neighborhoods. I think a sizable segment of the population has just gotten desensitized to the cost of it because they've come to see it as the "normal" cost.
There is a sizeable and growing group of people who legitimately do not know how to cook a meal for themselves. They actually go a to a restaurant for every meal, kitchen is unused basically.
Eat at corporate cafeteria for lunch, doordash or get takeout for dinner. Premade salads and microwave prep meals is "cooking." Every meal.
Eat at corporate cafeteria for lunch, doordash or get takeout for dinner. Premade salads and microwave prep meals is "cooking." Every meal.
This is extremely common almost everywhere in Asia. Many places still have SROs (which were outlawed in the US decades ago) which is essentially just a room and (nowadays) a bathroom. No kitchen so the only cooking tends to be instant noodles. Virtually every meal is eaten out or via delivery.
>SROs (which were outlawed in the US decades ago)
I found no evidence that existing SROs were "outlawed", rather that construction of new SRO hotels has severely declined from a century ago, for a number of reasons including laws/regulations.
I found no evidence that existing SROs were "outlawed", rather that construction of new SRO hotels has severely declined from a century ago, for a number of reasons including laws/regulations.
Anecdata, but I usually see people who live alone or DINKs that have been together for a long time use it the most often. Those who started dating usually opt to cook or go out together. Those with kids don't even bother.
When you never step foot inside a grocery store, it's easy to think that the price of takeout is just the normal price of food; that the "luxury" kind of food you don't eat all the time are the Michelin-star type places; that takeout is cheaper than cooking yourself because the restaurants do everything in bulk and pay low wages.
I'm a retiree. I don't have much time left to spend it on cooking. Going to a restaurant takes even more time than cooking. Ordering and opening the door is much faster. Anyway, my assistant does that. I do cook meals that take no more than 5 minutes of my time, like boiled eggs, rice, grilled meat or quick salad.
I am also retired and have more or less the same routine as you. I aim my own cooking time to a maximum of 7.5 minutes e.g. fried eggs and smoked salmon. I do open the door myself though. I hope you have an assistant because you can afford one and not because of some disability.
Oddly, one of the things I'm looking forward to doing in retirement, is spending more time cooking. I started learning in my 40's and can now competently cook some basic dishes. Once I'm retired I'll have more time to experiment and try out different things.
One of the upsides of cooking yourself, is knowing exactly what goes in to the meals you're eating and being able to control things like spice level and how well done you like your dishes.
One of the upsides of cooking yourself, is knowing exactly what goes in to the meals you're eating and being able to control things like spice level and how well done you like your dishes.
Exactly, in retirement I have more time to experiment and try out different things, but cooking is not one of them, and would take time away from truly exciting things:)
I was shocked when I went to college and we lived in a shared house for the summer to intern in the bay area, and I realized some people legit don't know how to cook anything, not even eggs or rice.
I tried to share my food with them but they didn't want it (admittedly I'm not Gordon Ramsey or anything). They were happy eating either frozen meals or doordash (back then it was cheaper) every dinner.
I tried to share my food with them but they didn't want it (admittedly I'm not Gordon Ramsey or anything). They were happy eating either frozen meals or doordash (back then it was cheaper) every dinner.
I moved back to the USA, SF in June 2021. I stayed with a friend and parnter for 5 days. In those 5 days they ordered via doordash for ~8 meals (lunch and dinner).
'21 is hardly representative, depending on where you were. If it was one of the bigger cities in blue states, they were paranoid about COVID until the early '22.
This seems to be the opposite of the trend but personally, due to some mixture of inflation, worsening service standards from the main delivery app where I live, and me just getting better at cooking, I've dialed back my food delivery app usage by like 80%.
Covid encouraged me to spend more time cooking and the result is that I now make better versions of most of my favorite dishes than any restaurant does (at least to my taste). I also worked out how to do their preparation in bulk so that they take a half hour or less to prepare.
This made me realize that meal delivery wasn't saving me as much time as I thought it was. Rather it was saving me from learning to cook, but you only have to do that once, and then you end up eating healthier, saving money, eating food that isn't cold because it wasn't sitting in a bag for an hour, and it takes less time than someone who can't cook probably thinks it does.
Grocery delivery on the other hand, now that service is worth its weight in gold. 2+ hours of work every week replaced with 10 minutes ordering online, which is mostly just going down the list of what I got last week and clicking add to cart.
Covid encouraged me to spend more time cooking and the result is that I now make better versions of most of my favorite dishes than any restaurant does (at least to my taste). I also worked out how to do their preparation in bulk so that they take a half hour or less to prepare.
This made me realize that meal delivery wasn't saving me as much time as I thought it was. Rather it was saving me from learning to cook, but you only have to do that once, and then you end up eating healthier, saving money, eating food that isn't cold because it wasn't sitting in a bag for an hour, and it takes less time than someone who can't cook probably thinks it does.
Grocery delivery on the other hand, now that service is worth its weight in gold. 2+ hours of work every week replaced with 10 minutes ordering online, which is mostly just going down the list of what I got last week and clicking add to cart.
Another strategy I like for groceries is walking to the store during my "lunch" break each day. It's never busy, you get used to the layout and can shop faster, it's easier to only choose ripe produce and to be selective with temporal price variations, it makes it easier to plan meals around produce that's ripening faster than you want, and you don't have the chore of dealing with a whole basket of groceries.
It still takes 2+ hours of work every week, but I was going to be walking or doing some sort of light exercise eventually anyway, and the mental break helps with focus on coding the second half of the day.
It still takes 2+ hours of work every week, but I was going to be walking or doing some sort of light exercise eventually anyway, and the mental break helps with focus on coding the second half of the day.
DoorDash has a button that lets you filter by items that are eligible for SNAP (food stamps) when ordering from a grocery store. So enough people living in poverty are using DoorDash that they thought it was worth building the feature.
Over forty million people receive SNAP benefits so even if only five percent of them use DoorDash, it's still a couple million customers. Any fees DoorDash or other delivery services add on have to be paid by the customer and cannot be charged to SNAP.
I have never once ordered delivery from an app. I very rarely order delivery period. I will order carry-out sometimes, maybe a few times a year, but I use the phone to place the order and I pick it up myself.
The American people have literally never been richer than the last 5 years. It’s mass affluence - the people door dashing are the newly mass affluent. It’s why the lines for ski lifts are so long and why Disney world is so packed
Young people?
They looked only at fast food, buffet and snack/cafe places:
The Spend data covers major national brands disproportionately, making it much more representative for limited-service/fast-food restaurants than full-service restaurants. We therefore restrict the sample to POIs reporting NAICS codes corresponding to limited-service eating places (NAICS 722513, 722514, and 722515) and associated with a brand for which there is non-missing visit and spend data. This encompasses three subcategories: limited-service restaurants (e.g., Taco Bell, McDonalds); cafeterias, grill buffets, and buffets (e.g., Hartz Chicken Buffet); and snack and nonalcoholic beverage bars (e.g., Starbucks). Our final sample contains over 100,000 unique restaurants from over 600 distinct brands. From January 2019 to December 2022, our sample captures a total of about $24 billion in nominal sales.This is a strong argument that habits formed during covid stuck around until today, as it was long enough to reshape the baseline.
Unfortunately these habits seem to affect the sociability of everyone, and I think we still underestimate what a terrible burden staying locked in was on the population.
Unfortunately these habits seem to affect the sociability of everyone, and I think we still underestimate what a terrible burden staying locked in was on the population.
Dying or becoming disable long term are also pretty bad for socializing. Anyone trying to take reasonable precautions for themselves or to protect vulnerable people around them has pretty much been jettisoned by society. Restaurants and bars are not the only way to socialize, but being unwilling to participate in those becomes a social death sentence.
I have a pet hypothesis that there is high correlation between the people choosing precautions and those who did the social & emotional labour of organizing and cohering in the before times. I'm not suggesting anything has stopped, clearly it hasn't. But it does sound like what remains is a thinner gruel barely covering the bottom of the pot.
I have a pet hypothesis that there is high correlation between the people choosing precautions and those who did the social & emotional labour of organizing and cohering in the before times. I'm not suggesting anything has stopped, clearly it hasn't. But it does sound like what remains is a thinner gruel barely covering the bottom of the pot.
So what kind of macro event might nudge us back to sociability?
Abstract: "We document that, after remaining almost constant for almost 30 years, real labor productivity at U.S. restaurants surged over 15% during the COVID pandemic. This surge has persisted even as many conditions have returned to pre-pandemic levels. Using mobile phone data tracking visits and spending at more than 100,000 individual limited service restaurants across the country, we explore the potential sources of the surge. It cannot be explained by economies of scale, expanding market power, or a direct result of COVID-sourced demand fluctuations. The restaurants’ productivity growth rates are strongly correlated, however, with reductions in the amount of time their customers spend in the establishments, particularly with a rising share of customers spending 10 minutes or less. The frequency of such ‘take-out’ customers rose considerably during COVID, even at fast food restaurants, and never went back down. The magnitude of the restaurant-level relationship between productivity and customer dwell time, if applied to the aggregate decrease in dwell time, can explain almost all of the aggregate productivity increase in our sample."
Huh. Interesting!
The finding is consistent with both the changes, since the pandemic, in my own eating-out habits and the behavior of other customers I see at restaurants I visit regularly.
Nonetheless, seeing it validated with an analysis of largish-scale data is worth the read.
The question is whether eating-out habits have permanently changed, or whether they will eventually revert to pre-pandemic patterns.
Thank you for sharing this on HN!
Huh. Interesting!
The finding is consistent with both the changes, since the pandemic, in my own eating-out habits and the behavior of other customers I see at restaurants I visit regularly.
Nonetheless, seeing it validated with an analysis of largish-scale data is worth the read.
The question is whether eating-out habits have permanently changed, or whether they will eventually revert to pre-pandemic patterns.
Thank you for sharing this on HN!
A lot of the change in behavior probably corresponds to more work from home and social isolation. I haven't been to a sit down restaurant in over 5 years, but I still grab a to go meal about once a quarter. With inflation, I'm less price sensitive too when I buy my quarterly big mack, so I go for it and supersize, may get mcnuggets too. So work from home and inflation probably factor in.
I don't think the number of takeout orders will reduce much unless restaurants need a reason to seat customers. Many restaurants didn't have good or any pickup systems prior to COVID and many users hadn't experienced the ease and cost benefits of app-based ordering (reward programs, etc).
I wonder if there are also cultural/regulatory differences here.
I'm in the EU, and of course we had the forced shift to takeout as well, during covid. But while homeoffice as a concept stayed, restaurants very quickly went back to in-house dining when it was over.
Seeing a takeout-only restaurant with a repurposed dine-in area here in 2025 would be beyond weird and would probably just give everyone covid flashbacks.
Interesting to see that the specifics of what has stayed from the covid time and what has reverted could be different from country to country.
I'm in the EU, and of course we had the forced shift to takeout as well, during covid. But while homeoffice as a concept stayed, restaurants very quickly went back to in-house dining when it was over.
Seeing a takeout-only restaurant with a repurposed dine-in area here in 2025 would be beyond weird and would probably just give everyone covid flashbacks.
Interesting to see that the specifics of what has stayed from the covid time and what has reverted could be different from country to country.
I'm an EU citizen and always saw going to a restaurant as a social event, somewhere to gather with friends, family, etc to have a good time. I never went to a restaurant to eat. Eating something delicious was just a bonus.
>I wonder if there are also cultural/regulatory differences here.
It has more to do with cost of rental and salary difference, comparing to median Income and spending. And it is a world wide thing.
It has more to do with cost of rental and salary difference, comparing to median Income and spending. And it is a world wide thing.
Eating out seems less popular in the the US right now. Everything is more expensive and there's the 18-25% tip that gets applied.
Going out to even a basic lunch with my wife is close to 50 usually for the meal.
Takeout I can tip the delivery person a little less. And keep left overs a little easier. Take out is only for being lazy, I'd still just cook and meet or beat in quality any restaurant except ones that mignt win an award or you can't do at home.
Going out to even a basic lunch with my wife is close to 50 usually for the meal.
Takeout I can tip the delivery person a little less. And keep left overs a little easier. Take out is only for being lazy, I'd still just cook and meet or beat in quality any restaurant except ones that mignt win an award or you can't do at home.
Pre COVID, takeout meant not tipping at all. We should probably shift back towards that world.
Post Covid, takeout also means no tipping. Just because someone programs a prompt doesn’t mean it needs to be answered in the affirmative.
I should have been clearer, meant delivery, only tip the driver, but its not 20%
most restaurants are absolutely terrible value for money.
Depends on what you value. If all you value are calories, then sure, there are much cheaper ways of getting the calories you need. But if you value time, or novelty, or the dining experience, or conversation with a neighbor or even just the bartender then there are plenty of places that cater to your values.
I can justify spending $25 to $50 a week eating at restaurants with friends. But eating fast food every single day is just pissing money away.
Sure, but money isn’t everything, and not everybody weighs their values the same way as you. Maybe they can justify it. Dishwashers are convenient, but you have to admit that paying someone else to put your dishes into the dishwasher is even more convenient.
The whole restaurant experience forced me to get more into cooking for myself because the value is just not there.
Low and behold it is actually fun to cook. It is actually more fun to be able to make a new dish yourself than to try a new restaurant. It is amusing how everything DIY is cool in hacker culture besides cooking. For no reason besides custom, people pretend they just don't have time to cook or that learning to cook isn't worth it. It is an obviously thoughtless idea.
Having less time to doom scroll your phone is a feature and not a bug.
Low and behold it is actually fun to cook. It is actually more fun to be able to make a new dish yourself than to try a new restaurant. It is amusing how everything DIY is cool in hacker culture besides cooking. For no reason besides custom, people pretend they just don't have time to cook or that learning to cook isn't worth it. It is an obviously thoughtless idea.
Having less time to doom scroll your phone is a feature and not a bug.
I discovered air fryers + cheap Costco chicken is a great combination! Chicken tenderloins are $3.30 a pound and take very little time to cook and are delicious, low calorie, and high in protein.
Especially if you're anything above a 7/10 home cook
It's funny that they say productivity is up when all of my local restaurants seem to be slower than ever ... but I digress.
> Especially if you're anything above a 7/10 home cook
I'd move your assessment down to a 5/10 home cook.
Most restaurants are using ingredients of sufficiently low quality that it is now pathetically easy to beat them on that axis. Using even slightly better ingredients than average puts you ahead of 90% of restaurants, nowadays--even for something as stupidly easy as a salad.
I'm super lazy, but local restaurants have gotten both so expensive and so slow that I'm always weighing whether to hit the local grocery store, grab some ingredients and throw something together at home.
> Especially if you're anything above a 7/10 home cook
I'd move your assessment down to a 5/10 home cook.
Most restaurants are using ingredients of sufficiently low quality that it is now pathetically easy to beat them on that axis. Using even slightly better ingredients than average puts you ahead of 90% of restaurants, nowadays--even for something as stupidly easy as a salad.
I'm super lazy, but local restaurants have gotten both so expensive and so slow that I'm always weighing whether to hit the local grocery store, grab some ingredients and throw something together at home.
Cooking is also a skill that is easy to improve on and not an inborn genetic property that someone has or doesn't have.
The way people that don't cook talk about cooking you would think it is on the level of work involved in roofing or pouring cement blocks.
I am literally cooking a Thai dish right now. I could have went to the Thai restaurant but tinkering with this dish is actually more fun.
The way people that don't cook talk about cooking you would think it is on the level of work involved in roofing or pouring cement blocks.
I am literally cooking a Thai dish right now. I could have went to the Thai restaurant but tinkering with this dish is actually more fun.
After spending all day 'building' intangible things in a virtual world I really love actually making something real with my hands and then eating it with my wife
Eh, for most restaurants I wold say 5/10. So much restaurant food is just reheated stuff they buy from Sysco.
A 5 minutes walk from my home at the European capital where I live there's a Japanese food restaurant that has a small dine-in area where they removed all tables and just do takeout now. It's not that uncommon.
> Seeing a takeout-only restaurant with a repurposed dine-in area here in 2025 would be beyond weird
Well, I’m in California and I have no idea what that would look like - it’s just not a thing where I am, nor do I see it mentioned in that abstract. What are you referring to??
Well, I’m in California and I have no idea what that would look like - it’s just not a thing where I am, nor do I see it mentioned in that abstract. What are you referring to??
I’m in California and there is a take out only Dominoes near me.
The first In-n-Out had no seating or parking.
The first In-n-Out had no seating or parking.
Friedmanite economists lauding the "productivity increases" of restaurants, meanwhile I have stopped eating anywhere except food trucks because mid-tier dining is so bad now due to cost-cutting and loss of expertise.
Yeah that tracks for Chicago School economics.
Yeah that tracks for Chicago School economics.
The paper does not cover "mid-tier dining." It covers fast food because that's where they had good data.
Moreover, real restaurant spending in total is up, so while your personal dining decisions are interesting they don't appear to reflect the aggregate data.
I'm also not sure why you are calling Goolsbee a "Friedmanite." He served in the Obama administration and advocated strong government intervention during the financial crisis. Do you think every UChicago economist is a Friedman disciple?
Lastly, where did you infer the economists are "lauding" the productivity increases? It appears nowhere in the paper. They only defined productivity increases and explained why they occurred. Was there some other reason you wanted them to be lauding it, other than to justify your anger with people whose policy beliefs you don't seem to be familiar with?
Moreover, real restaurant spending in total is up, so while your personal dining decisions are interesting they don't appear to reflect the aggregate data.
I'm also not sure why you are calling Goolsbee a "Friedmanite." He served in the Obama administration and advocated strong government intervention during the financial crisis. Do you think every UChicago economist is a Friedman disciple?
Lastly, where did you infer the economists are "lauding" the productivity increases? It appears nowhere in the paper. They only defined productivity increases and explained why they occurred. Was there some other reason you wanted them to be lauding it, other than to justify your anger with people whose policy beliefs you don't seem to be familiar with?
> I'm also not sure why you are calling Goolsbee a "Friedmanite."
The paper is from the Becker-Friedman Institute of Economics. It is literally the Chicago school. Do the authors need to call themselves disciples of Milton Friedman?
> I'm also not sure why you are calling Goolsbee a "Friedmanite." He served in the Obama administration and advocated strong government intervention during the financial crisis. Do you think every UChicago economist is a Friedman disciple?
Most orthodox economists at this point are. Sure maybe an ideologically pure free marketeer would have advocated against government intervention in 2008. But do you really think this guy is outside the neoliberal mainstream?
> where did you infer the economists are "lauding" the productivity increases?
Neoliberal economists believe that productivity is inherently good. I don't see anything in this paper about quality of life of employees or quality of service. Elevating one dimension above everything else implies a particularly importance of that dimension.
The paper is from the Becker-Friedman Institute of Economics. It is literally the Chicago school. Do the authors need to call themselves disciples of Milton Friedman?
> I'm also not sure why you are calling Goolsbee a "Friedmanite." He served in the Obama administration and advocated strong government intervention during the financial crisis. Do you think every UChicago economist is a Friedman disciple?
Most orthodox economists at this point are. Sure maybe an ideologically pure free marketeer would have advocated against government intervention in 2008. But do you really think this guy is outside the neoliberal mainstream?
> where did you infer the economists are "lauding" the productivity increases?
Neoliberal economists believe that productivity is inherently good. I don't see anything in this paper about quality of life of employees or quality of service. Elevating one dimension above everything else implies a particularly importance of that dimension.
> Becker-Friedman Institute of Economics. It is literally the Chicago school.
It may be, but don't expect organizations to remain true to their names over time. There are very few Friedman-minded economists out there nowadays.
It may be, but don't expect organizations to remain true to their names over time. There are very few Friedman-minded economists out there nowadays.
It feels like under whatever hood one looks or whichever layer of paint one looks behind - when it’s a relatively new change in society, one always finds the root cause to be neoliberalism.
Your comment reconfirms this especially pictorially with the last statement: productivity and it alone goes up and quality or service are not even part of the equation.
Your comment reconfirms this especially pictorially with the last statement: productivity and it alone goes up and quality or service are not even part of the equation.
I get why people took issue with my parent comment, because it seems like I am just whining that economists are measuring the only things they can measure. But it's like the fish asking "what's water?".
why do we pay people to measure these things? why do they measure what they measure and not something else? why is this type of thinking dominant among the technocratic elite? Especially when the view from the ground floor only seems to be getting worse and worse.
why do we pay people to measure these things? why do they measure what they measure and not something else? why is this type of thinking dominant among the technocratic elite? Especially when the view from the ground floor only seems to be getting worse and worse.
Most of the profession of economics in the last several decades has been focused on figuring out how to measure difficult-to-measure truths about how people behave. That's what behavioral economics is about. The other name on the UChicago institute you don't like, Gary Becker, won a Nobel for finding ways to creatively study behaviorism: family structure, why people commit crime, studying societal benefits from education, and quantifying damage of discrimination.
You might argue that we shouldn't measure things at all -- that it is better to live in darkness and ignorance, and make vague gestures about the way things are with no evidence or rigorous thought. Measuring is how we find truth. Sometimes it is hard. But throwing away our measuring tools is not the path to enlightenment.
Many people choose to ex ante dislike economists, and dismiss anything any of them have to say without further study, because there is a risk that the results of quantifying the world might disagree with their preconceptions.
You might argue that we shouldn't measure things at all -- that it is better to live in darkness and ignorance, and make vague gestures about the way things are with no evidence or rigorous thought. Measuring is how we find truth. Sometimes it is hard. But throwing away our measuring tools is not the path to enlightenment.
Many people choose to ex ante dislike economists, and dismiss anything any of them have to say without further study, because there is a risk that the results of quantifying the world might disagree with their preconceptions.
I understand the value of economics as a social science, and there are some policies that economists propose that I like. However, a lot of this stuff is either just justification for neoliberal policies, or just common sense.
For example, a neoliberal economist like Becker would say: "There's actually an economic disincentive for racial discrimination"
Sure, if your economic analysis does not take into account class conflict, which most orthodox economists do not. Discrimination is borne intentionally out of class conflict as a tool of dividing the working class.
Orthodox economics is like having a bunch of scientists devoted to a pre-heliocentric model of the solar system. They can describe isolated phenomena within the accepted framework, but they will never be able to accurately describe (in full) the world around them because their foundational world model is incorrect.
For example, a neoliberal economist like Becker would say: "There's actually an economic disincentive for racial discrimination"
Sure, if your economic analysis does not take into account class conflict, which most orthodox economists do not. Discrimination is borne intentionally out of class conflict as a tool of dividing the working class.
Orthodox economics is like having a bunch of scientists devoted to a pre-heliocentric model of the solar system. They can describe isolated phenomena within the accepted framework, but they will never be able to accurately describe (in full) the world around them because their foundational world model is incorrect.
I don’t see how explaining productivity increases that didn’t have a previous known origin is “lauding”. What measurable phenomena do you think economists should focus their research on instead?
Actually wait, that’s the whole issue. The things being superseded for productivity here aren’t measurable.
No, they did measure them, they just didn't bother to value them. People are spending less time in the restaurants (<10 minutes.) People spending time in the restaurants are getting service (cleaning etc.) and use of the space/dishes. They aren't accounting for these services.
I’m not sure I agree it’s entirely measurable. Often when something becomes more productive at the expense of something, that something is the comfort of being in the place or the friendliness of the staff or… and these things are intrinsically tough to measure. Not unmeasurable I suppose, but challenging by comparison.
Then how would you expect an economist to study it, go to restaurants and report their opinions? The comment i was replying to is essentially being snarky that economist are doing what they’re supposed to. Seeing and explaining economic trends.
> Then how would you expect an economist to study it, go to restaurants and report their opinions?
Unironically yes. There are dimensions other than raw profitability that determine the health of a sector. The work that chicago school economists do flattens everything onto just a financial axis, which is harmful in my opinion. What do I care about the "productivity" of the restaurant sector when all the food tastes like shit?
Unironically yes. There are dimensions other than raw profitability that determine the health of a sector. The work that chicago school economists do flattens everything onto just a financial axis, which is harmful in my opinion. What do I care about the "productivity" of the restaurant sector when all the food tastes like shit?
Every sience has the dual purpose of performing measurements and identifying what measurements can possibly be taken.
Food trucks are also more productive and since the study is a look at the market you’re part of the data that supports the industry increase in productive due to your switch from dine-in to food trucks.
People switched away from cash during COVID. Lots of people who might have been unbanked or lightly banked went all-in as everything went digital.
Now restaurants (historically a pretty cash-heavy industry) have fewer cash transactions.
Possibly related?
Now restaurants (historically a pretty cash-heavy industry) have fewer cash transactions.
Possibly related?
Oh now that is an interesting observation. A long standing dirty secret.
Very maybe!
Very maybe!
Absolutely and unequivocally, the mismeasure of man. How exactly do you measure productivity in a restaurant? Profit?
If a chicken and a half, layed an egg and a half in a day and a half, how much productivity is gained by the chicken with a cell phone? A smidgen?
The premise is of course completely preposterous.
If a chicken and a half, layed an egg and a half in a day and a half, how much productivity is gained by the chicken with a cell phone? A smidgen?
The premise is of course completely preposterous.
I think the move away from cash coincided with COVID but was not related much.
The convenience of digital simply made cash useless (mostly).
The convenience of digital simply made cash useless (mostly).
> The convenience of digital simply made cash useless (mostly).
Useless? Wait until your digital transactions fail or your bank or your state decides to block your access to your payment system. And believe me, it's not a "if", this is a real threat that will be waged against people. When it's technically possible, it always ends up becoming a reality. And by that time, "going back to cash" may not be an option in certain places, because of 'convenience'.
Useless? Wait until your digital transactions fail or your bank or your state decides to block your access to your payment system. And believe me, it's not a "if", this is a real threat that will be waged against people. When it's technically possible, it always ends up becoming a reality. And by that time, "going back to cash" may not be an option in certain places, because of 'convenience'.
And you may get hit by an airplane falling from the sky. Yet people don't stay home because of that. It's a risk assessment. The risk of getting ban from digital payment is not zero, but low enough that the convenience wins out. I haven't carried cash for at least a year, and almost don't carry physical cards nowadays, only my phone. Can I be locked out? for sure. Do I care? Not yet. You are different, of course. I don't tell you what you should do.
That's arguably already the reality in the US to some extent. Many people I know don't even carry enough cash to pay for a single meal, unless they know they'll be going to a cash only place.
Is that more or less likely than the state deciding to block your access to freedom, and arresting and imprisoning/deporting you?
When you live in an authoritarian state with arbitrary law 'enforcement', the problem isn't the payment system that you're using. It's that you no longer live in a country of laws.
And that's not a problem that's going to be solved by using dead tree money.
When you live in an authoritarian state with arbitrary law 'enforcement', the problem isn't the payment system that you're using. It's that you no longer live in a country of laws.
And that's not a problem that's going to be solved by using dead tree money.
More likely, by a huge margin, since it takes only checking a box in some software system, whereas the alternatives you mention need a lot of messy work to achieve.
States that aren't governed by rule of law have no issue with doing 'messy work'. All the pieces of the security apparatus are already there, and they are full of people who will obey.
I don't see the relevance in your comment. I'm saying it's useless in the sense that I haven't paid for nearly a single thing in cash in a year or two, and this is because of convenience and not because of COVID.
I haven't paid for nearly a single thing with cards in a year or two, and this is because of principle.
You missed the point.
The point is that a lot of restaurants used to not report a lot of cash transactions.
If almost everybody is using digital, the restaurant no longer has the option to underreport as there is an indelible transaction record (generally with an outsourced third party handling your credit cards).
So, some amount of the "productivity increase" is simply the underreported cash transactions now coming onto the books.
The point is that a lot of restaurants used to not report a lot of cash transactions.
If almost everybody is using digital, the restaurant no longer has the option to underreport as there is an indelible transaction record (generally with an outsourced third party handling your credit cards).
So, some amount of the "productivity increase" is simply the underreported cash transactions now coming onto the books.
Taxi drivers suffered the same thing with the rise of Uber etc. Every fare is now logged in detail.
My take away is that the overall labor per customer decreases because workers are spending less time on non-cooking/serving tasks. The paper implies the efficiency gain is in how labor is used rather than production or serving efficiency. This seems like an anticlimactic conclusion.
Yup, they pretty much state that explicitly right in the abstract. I think we have a relatively rare example of a clickbait scientific paper title, here!
“If everyone’s doing takeout, you need fewer employees” isn’t exactly a shocking revelation.
“If everyone’s doing takeout, you need fewer employees” isn’t exactly a shocking revelation.
It feels worth measuring formally so that the scientific community can basically treat this as a known, citable fact and have some numbers to work with.
I do wonder if the somewhat elliptical, high academic writing (“take-out” in quotes as if it’s an exotic term) and talk of a mystery being solved is to deflect criticism that this feels obvious or like a WSJ story.
I do wonder if the somewhat elliptical, high academic writing (“take-out” in quotes as if it’s an exotic term) and talk of a mystery being solved is to deflect criticism that this feels obvious or like a WSJ story.
It never ceases to amaze me when tech people take issue with jargon in other fields.
The authors use academic tone because they’re academics writing for academics.
The conclusion might feel obvious to you (very conveniently, when you’ve already been handed the answer) but what’s notable is proving it with data and rigorous analysis.
The authors use academic tone because they’re academics writing for academics.
The conclusion might feel obvious to you (very conveniently, when you’ve already been handed the answer) but what’s notable is proving it with data and rigorous analysis.
I would have guessed that the surge had something to do with faster payments, namely contactless and the wireless terminals. In a way, it's even broader than that: if you order for pick up and prepay, payment is pretty much out of the picture entirely, replaced by just verifying that you are getting the right order. Then you're avoiding the productivity losses in serving the dishes, washing the plates, etc.
I'm confused. The paper is about something called "Restaurant Productivity", but it's not defined up-front, or any place close to up-front. Maybe, it's defined by page 9, but it's hard to tell. It all might be completely correct, but for God's sake write a paper that a reasonably intelligent person can follow. What are we talking about? What do we know? What you think we know, but isn't true. What we now believe, having done the analysis. Quick summary, and then done. I think Goolsbee is famous somewhere, but why be a lead author on a badly written paper? It's just prose. Maybe it's true, but who'd know?
Page 2:
>Figure 1 shows the remarkable shift in restaurant productivity after years of stagnation. It plots monthly real sales per employee in the industry from the beginning of 1992 to the present (in annualized terms).2
>Figure 1 shows the remarkable shift in restaurant productivity after years of stagnation. It plots monthly real sales per employee in the industry from the beginning of 1992 to the present (in annualized terms).2
Yes, and even on page 1: "reveal significant productivity growth among individual restaurants whether measured in sales per employee or even in a more basic/physical measure of total consumer visits per employee."
People got out of their comfort zone during COVID and tried new things.
Campgrounds got packed, people got into skateboarding… if you look at statistics, you’ll see a 2020-ish bump for many interests and an associated sudden growth in revenue.
But the question is how long it will last…
Some outdoor brands that expanded with new stores post-pandemic discovered that many people who tried camping/surfing/etc. only had a fleeting interest and these brands had to close stores.
Tech companies that hired during the pandemic found out a lot of people who tried online meetings/online work only did it because they had to and stopped as soon as they could and these companies had to lay off staff.
But maybe the people who “discovered delivery orders” during COVID won’t ever stop.
Campgrounds got packed, people got into skateboarding… if you look at statistics, you’ll see a 2020-ish bump for many interests and an associated sudden growth in revenue.
But the question is how long it will last…
Some outdoor brands that expanded with new stores post-pandemic discovered that many people who tried camping/surfing/etc. only had a fleeting interest and these brands had to close stores.
Tech companies that hired during the pandemic found out a lot of people who tried online meetings/online work only did it because they had to and stopped as soon as they could and these companies had to lay off staff.
But maybe the people who “discovered delivery orders” during COVID won’t ever stop.
> Tech companies that hired during the pandemic found out a lot of people who tried online meetings/online work only did it because they had to and stopped as soon as they could and these companies had to lay off staff.
Quite the opposite: Many (US) companies are still figuring out how to get their office employees to actually start coming to physical offices again.
There seem to have been more lasting pandemic-caused changes of habits in the US than in many other countries, which I also find quite surprising. Maybe people were already more tired of dining out and office work there than in the rest of the world, and that's why the changes in behavior are more sticky?
Quite the opposite: Many (US) companies are still figuring out how to get their office employees to actually start coming to physical offices again.
There seem to have been more lasting pandemic-caused changes of habits in the US than in many other countries, which I also find quite surprising. Maybe people were already more tired of dining out and office work there than in the rest of the world, and that's why the changes in behavior are more sticky?
People only were working remotely that much because everyone was forced to be home which was unprecedented. It can only possibly go downhill from “everyone was forced to be home.”
But even that aside, according to Gallup, exclusively remote employees fell from a high of 70% to a measly 26%(!).
Many employees did transition to hybrid work but working fully remotely is very different than knowing that you’ll see Mary and Bob in the office tomorrow.
https://www.gallup.com/401384/indicator-hybrid-work.aspx
But even that aside, according to Gallup, exclusively remote employees fell from a high of 70% to a measly 26%(!).
Many employees did transition to hybrid work but working fully remotely is very different than knowing that you’ll see Mary and Bob in the office tomorrow.
https://www.gallup.com/401384/indicator-hybrid-work.aspx
Another thing driving people back is actually IT departments. Managing remote devices is difficult and adds a lot of complexity. I did a couple years of contracting after COVID and a lot of these companies had to scramble to figure it out and now have weird hacked together hybrid AD/Intune/AAD setups that now are an unwieldy mess. Buying whatever laptops they could find on short notice has led to random makes and models that present another set of challenges. Much easier to manage when all the devices are in the office and everyone has the same ThinkCenter that gets policy from the local domain controller.
I'm a huge proponent of WFH but I think the cost of the management challenge that presents is often ignored. Is it a net saving for the company? Maybe. IT departments? Absolutely not.
I'm a huge proponent of WFH but I think the cost of the management challenge that presents is often ignored. Is it a net saving for the company? Maybe. IT departments? Absolutely not.
This doesn't seem right.
Even the companies with the strongest RTO policies still allow many employees to work from home one day a week / if they are sick / if they are on call / in other extenuating circumstances. So those IT departments still have to manage a fleet of off-premises devices of approximately the same size.
Maybe there are small savings from underprovisioning VPNs, or fewer support requests when people will all be in the office regularly, but that seems tiny in comparison.
Even the companies with the strongest RTO policies still allow many employees to work from home one day a week / if they are sick / if they are on call / in other extenuating circumstances. So those IT departments still have to manage a fleet of off-premises devices of approximately the same size.
Maybe there are small savings from underprovisioning VPNs, or fewer support requests when people will all be in the office regularly, but that seems tiny in comparison.
The issue isn't a laptop going home once a week, it's never being on the LAN at all after they are imaged. It has nothing to do with "VPN provisioning" or whatever you mean by that. The problem is that all the policies and tools implemented expected the devices to be on the LAN at least occasionally.
"The restaurants’ productivity growth rates are strongly correlated, however, with reductions in the amount of time their customers spend in the establishments, particularly with a rising share of customers spending 10 minutes or less. The frequency of such ‘take-out’ customers rose considerably during COVID, even at fast food restaurants, and never went back down."
Well, duh.
I feel I'm in the way eating in a restaurant when 90% of their business is filling DoorDash/Uber orders.
Restaurants are closing earlier. 8 PM closing isn't unusual now. By then, the delivery business has dried up, and they want the onsite customers to clear out.
I previously mentioned a place in Silicon Valley near Apple HQ where not only did they want onsite customers to order via a QR-code menu, they tried to get customers to go through onboarding and set up an account. Eating onsite was simply a delivery with a very short distance, bag and all.
Of course "productivity" is up.
Well, duh.
I feel I'm in the way eating in a restaurant when 90% of their business is filling DoorDash/Uber orders.
Restaurants are closing earlier. 8 PM closing isn't unusual now. By then, the delivery business has dried up, and they want the onsite customers to clear out.
I previously mentioned a place in Silicon Valley near Apple HQ where not only did they want onsite customers to order via a QR-code menu, they tried to get customers to go through onboarding and set up an account. Eating onsite was simply a delivery with a very short distance, bag and all.
Of course "productivity" is up.
I hate places like that, and I especially hate still being asked to tip 18 (or often 20) to 25 percent when I effectively did everything myself, including picking up my order (often in plastic containers, for my daily dose of microplastics and other funs tuff), getting water, and clearing my table.
Fortunately that's still the exception rather than the norm where I live, but I try to actively avoid such experiences.
Fortunately that's still the exception rather than the norm where I live, but I try to actively avoid such experiences.
I wonder if the surge in productivity would hold up if you also take into account the productivity of delivery people, who are with the move to delivery apps as much a part of the kitchen-to-table pipeline as the people working in the kitchens. I don't have any data on what they typically make, but my very anecdotal evidence suggests it's usually not much, especially when you take into account the gas, wear and tear on the car, etc.
As a group they may actually lose money, though they might not realize it. The big thing that nobody factors in is insurance - personal auto insurance policies generally don't cover business use, and if your insurance company finds out you were driving for DoorDash when you rear-ended someone, they won't pay out.
You can get a commercial rider for your policy, but then you won't make any money.
A buddy of mine was trying to make one of those companies his full time job, and it just didn't work out. There are too many hidden costs.
You can get a commercial rider for your policy, but then you won't make any money.
A buddy of mine was trying to make one of those companies his full time job, and it just didn't work out. There are too many hidden costs.
I've noticed at several Thai restaurants in the Portland area that we are the only or almost only customers in the restaurant. There's a steady stream of Door Dash, Uber Eats, etc. drivers picking up orders.
I haven't noticed it as much with other restaurants. Maybe Thai (and other Asian) dishes hold up well because the topping is typically kept separate from the rice?
I haven't noticed it as much with other restaurants. Maybe Thai (and other Asian) dishes hold up well because the topping is typically kept separate from the rice?
Idk, think it's probably just cost and food quantity, at least where I am. I can order $30 worth of Thai and have 2 days worth of food while for the same price I get one ghost kitchen burger with fries.
As a kid, the only delivery was pizza and Chinese. It is odd to think it is so much like that.
Eating in American restaurants where there is constant pressure to shovel in
the food and leave, is a waste. You feel like you're on an assembly line. What's the point then? On top of that they have the gall to ask for 25% tips. For what? Pressuring me to leave?
I enjoy visiting Eastern Europe(and Europe in general) where a party can sit at a table at 7pm, dine, drink, talk, and relax and remain there until close at 1am if they want. No pressure. Just spending time with people and sharing food together. The table is yours for the evening. No pressure to tip at all yet I tip generously.
America's got it all wrong.
I enjoy visiting Eastern Europe(and Europe in general) where a party can sit at a table at 7pm, dine, drink, talk, and relax and remain there until close at 1am if they want. No pressure. Just spending time with people and sharing food together. The table is yours for the evening. No pressure to tip at all yet I tip generously.
America's got it all wrong.
> enjoy visiting Eastern Europe(and Europe in general) where a party can sit at a table at 7pm, dine, drink, talk, and relax and remain there until close at 1am if they want
Would note that this is common at high-end restaurants in America. (Unless they sear at 10 or 11PM, in which case they may want another turn of tables.)
Would note that this is common at high-end restaurants in America. (Unless they sear at 10 or 11PM, in which case they may want another turn of tables.)
It depends on the restaurant. If there is a line of patrons to be seated they will definitely nudge you toward conclusion. Even if they are not busy the more customers a waiter churns through the more they earn. I find tips deceptive. One is not evaluating service quality. It’s just letting them advertise prices at 75% of actual cost before 20% de facto mandatory tip and 10% sales tax.
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Where? NYC? The densest cities in the country? If you get outside the metropolises it's not like that at all. That's just a reflection of demand and population density.
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And every restauranteur I’ve spoken to uniformly describe the last few years as miserable
Coming from Chicago, famous for its Economics, this article, and its premise are mystifingly inadequate for even answering why their metrics are so poorly used and misunderstood. I would go through and point out most of the utter lack of understanding and rigor. Soon this article, and its lack of scholarship will sink gently into the muck. Here is something to cleanse the palette:
https://www.nytimes.com/2012/12/10/opinion/krugman-robots-an...
https://www.nytimes.com/2012/12/10/opinion/krugman-robots-an...
My first thought upon seeing the headline was that perhaps this could be due to a workforce that has abandoned or has been abandoned by other industries- providing an influx of enthusiasm, competition, variety, and desperation.
But, then I read:
> We document that, after remaining almost constant for almost 30 years, real labor productivity at U.S. restaurants surged over 15% during the COVID pandemic.
So I wonder if it’s a combination of workers getting better tips and more people buying takeout meals?
But, then I read:
> We document that, after remaining almost constant for almost 30 years, real labor productivity at U.S. restaurants surged over 15% during the COVID pandemic.
So I wonder if it’s a combination of workers getting better tips and more people buying takeout meals?
So offended that Steak N Shake has order screens instead of servers these days and they still expect a similar tip before service is even rendered.
same with shake shack, went there once, never going back. also asked me for my phone number.
if you’re lucky enough to have a shake shack with a drive through - most don’t - they don’t ask for a tip and your order is delivered more quickly and you don’t have to use a tablet.
ours has a drive thru so we regularly drive thru and bring the food inside and eat it.
ours has a drive thru so we regularly drive thru and bring the food inside and eat it.
Would the numbers reflect the same if restaurants increased had their contingent of undocumented and thus undeclared workers?
For example: If I perviously had 1 server, then brought in a second one which is not on the books at all and I pay under the counter in cash, would it show up as a productivity increase of my still official single employee?
For example: If I perviously had 1 server, then brought in a second one which is not on the books at all and I pay under the counter in cash, would it show up as a productivity increase of my still official single employee?
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How people can afford take out? Uber eats etc charge rates are insane like 20$ per order (don’t forget the driver tip). I also noticed they have a variable cost as well aka if you order food worth 100$ you pay more compared to if the food was 50$. Like this adds to the delivery cost.
I get recruitment emails for a startup some people from Uber are making called Cloud Kitchens. Basically kitchens that can scale based on demand. The company provides ingredients and the kitchens make the food. Share resources make it more productive. I think restaurants themselves are unproductive.
> I think restaurants themselves are unproductive.
You think one of the staples of all commerce for basically all of time are unproductive?
I would imagine basically any form of sustainability for them has been tried. Sure patterns change; but, I mean literal millennia of food service is something to not ignore.
You think one of the staples of all commerce for basically all of time are unproductive?
I would imagine basically any form of sustainability for them has been tried. Sure patterns change; but, I mean literal millennia of food service is something to not ignore.
Yeah, true. I meant sitdown restaurants.
Those have been around for centuries ... like ... the "Tavern" trope is among the oldest of tropes
It's a little frustrating to me that the paper breaks out major chains as the big contributing factors, but doesn't analyze the remaining bucket. If possible I'd like to see the restaurants sliced by $/visit to see the effects on mid- or high-end restaurants.
I don't have to deal with racist waiters by ordering through an app and having it delivered. This is a win-win where the restaurant is more "productive" and I don't have to deal with the staff guessing my race so they know how badly to treat me.
I've been a waiter or bartender on and off since University days - I'm really sorry you've experienced that. Making someone feel unwelcome is maybe the worse mistake you can make as a Server in restaurant - it leaves an impression on people, as You've noticed.
Obviously, they failed their job responsibilities - failed at being people too. The owner/manager should never be allowing such behavior, if they are acting in a way that makes you feel like you do, that shouldn't be happening at all. That is an administrative failure too.
I'm sorry that it's like that. I'd say stop eating there but you shouldn't have to do that even.
Obviously, they failed their job responsibilities - failed at being people too. The owner/manager should never be allowing such behavior, if they are acting in a way that makes you feel like you do, that shouldn't be happening at all. That is an administrative failure too.
I'm sorry that it's like that. I'd say stop eating there but you shouldn't have to do that even.
QR code menus, and phone or tablet ordering, also took off. Surely that affects productivity as well.
Im guessing also, just doing things with thinner staff and resources overall caused a lot of establishments to learn how to operate more efficiently.
Im guessing also, just doing things with thinner staff and resources overall caused a lot of establishments to learn how to operate more efficiently.
I hate those with a passion!
Especially ones where you have to create an account.
Especially ones where you have to create an account.
Restaurant dining rooms are a complete waste of valuable real estate. Everybody wanted to live like millionaires in the 50s without a thought for sustainability. Two hour drive into downtown to park your cat in a reserved spot and walk your wife and 2.5 children to their reserved seats, eat a 3 course meal with a waiter all for under 100 bucks including gas and tip.
It was never going to last. If you don't use your resources efficiently from the very beginning your country is going to stagnant
It was never going to last. If you don't use your resources efficiently from the very beginning your country is going to stagnant
I loved the typo "parking your cat" -- that would indeed be the height of decadence.
They probably offer less complex dishes with simpler to cook ingredients.
This uses the economists' definition of "productivity" creating a confusing headline.
In reality, "productivity" as a layperson would understand it hasn't increased at all and the reason isn't very "curious." What's happened (by the economists' own conclusion) is that more people are ordering take-out and fewer people are eating in the restaurant, causing the restaurant to make more money per unit of labor. This is a trend that is probably going to make things like social isolation etc. worse, so not really something to celebrate.
In reality, "productivity" as a layperson would understand it hasn't increased at all and the reason isn't very "curious." What's happened (by the economists' own conclusion) is that more people are ordering take-out and fewer people are eating in the restaurant, causing the restaurant to make more money per unit of labor. This is a trend that is probably going to make things like social isolation etc. worse, so not really something to celebrate.
It's because a lot of "family" dining establishments went out of business and every type of "fast" establishment grew.
Over in say, Europe, the cost of commercial real estate is much lower (including more restaurants owning their own building) and governments simply covered lost revenue versus loans which enabled more full service restaurants to stay in business.
The fact is, full service restaurants are a horrible business model and most aren't priced appropriately (they should be priced much higher).
Over in say, Europe, the cost of commercial real estate is much lower (including more restaurants owning their own building) and governments simply covered lost revenue versus loans which enabled more full service restaurants to stay in business.
The fact is, full service restaurants are a horrible business model and most aren't priced appropriately (they should be priced much higher).
Productivity here is sales per employee. That's why productivity has "shot up" during the pandemic. "Productivity" remained high because you can look page 20 where people no longer stay at the restaurant and just order food online or food to go.
tl;dr: restaurants are becoming shittier and people are just grabbing food. that makes it possible for the restaurant to maximize his sales/head count. There is no real "productivity" gain here. You removed parts of the usual service, put more load on your employees and still charge high prices.
tl;dr: restaurants are becoming shittier and people are just grabbing food. that makes it possible for the restaurant to maximize his sales/head count. There is no real "productivity" gain here. You removed parts of the usual service, put more load on your employees and still charge high prices.
i'm not sure how this is anything to do with productivity
surely that's when the same product or service is delivered more cheaply
the starting question must have been more like 'why are restaurants more profitable now'
and it's because restaurants are now selling more take-out meals; essentially a different product, which has lower overheads
surely that's when the same product or service is delivered more cheaply
the starting question must have been more like 'why are restaurants more profitable now'
and it's because restaurants are now selling more take-out meals; essentially a different product, which has lower overheads
Labor productivity is just a technical term in this case.
https://www.investopedia.com/terms/l/labor-productivity.asp
https://www.investopedia.com/terms/l/labor-productivity.asp
TL;DR; “productivity” of restaurant in the colloquial sense hasn't progressed, but restaurants have diversified their business to the growing market of delivery apps, which is less labor intensive, hence the boost in observed “productivity”.
My favorite ~75 year old BBQ place here in Pasadena has half the bar (where you'd sit and eat and socialize if you were eating alone) reserved to give space for all the take-out orders and uber-eats pickups flowing through. I see single people come in and, without a space at the bar, take a seat at a booth alone.
I don't blame restaurants for this at all, it's a tough business, but I do think it's about time we apply just an ounce of shame to people who uber-eats every meal they eat from restaurants clearly designed for eating-in. Not to rant, but take out is for the pizza place, the Indian grocery store with no seating, the tiny hole-in-the-wall Chinese place, etc. If you order a southern fried chicken plate from a nice neighborhood restaurant for delivery, shame on you. Delivery sushi? Boo and hiss!
I don't blame restaurants for this at all, it's a tough business, but I do think it's about time we apply just an ounce of shame to people who uber-eats every meal they eat from restaurants clearly designed for eating-in. Not to rant, but take out is for the pizza place, the Indian grocery store with no seating, the tiny hole-in-the-wall Chinese place, etc. If you order a southern fried chicken plate from a nice neighborhood restaurant for delivery, shame on you. Delivery sushi? Boo and hiss!
"I do think it's about time we apply just an ounce of shame to people who uber-eats every meal they eat from restaurants clearly designed for eating-in"
Help me out here. What negative effect does that behavior have on the world such that people should feel shame for doing it?
(I'm still Covid cautious enough that I avoid dining indoors in places where I share air with strangers. This is a huge lifestyle limitation, but I enjoy not having to deal with long Covid very much.)
Help me out here. What negative effect does that behavior have on the world such that people should feel shame for doing it?
(I'm still Covid cautious enough that I avoid dining indoors in places where I share air with strangers. This is a huge lifestyle limitation, but I enjoy not having to deal with long Covid very much.)
Ghost kitchens instead of community gathering places. 100 year old bar space used to stack outgoing uber-eats orders instead of for people to meet and chat. More plastic waste used on packaging. Fewer home-cooked meals. More time spent in front of the TV instead of in your community. A disrespect for expensive and supply-limited food - delivery sushi in particular strikes me as a culinary crime.
It's really not that big of a deal, but I will never not be a bit irked by that bar space being used to stack bags instead of to serve beer and brisket.
It's really not that big of a deal, but I will never not be a bit irked by that bar space being used to stack bags instead of to serve beer and brisket.
Restaurants were never community gathering places. I've been on this planet for more than 40 years and this is rose colored bullshit, sorry dude. You're forgetting that home cooked meals also include mac and cheese and frozen green beans and tater tots. Whatever past you're pining for is a fantasy, or pre world war 2.
It’s the age old story of change aversion. I imagine one can post-hoc rationalize an argument for the decrease in third spaces and ensuing loneliness or some nonsense that will quote statistics of the quality of “50% of all Americans live paycheck to paycheck”.
You'd think the extravagant markups, missed deliveries, and cold food would be enough.
Nothing wrong with someone sitting in a booth alone if there’s a seat. It’s up to the restaurant to worry about maximizing their space. And it’s the restaurant’s choice to serve the take-out market. Shaming customers isn’t going to fix or change anything, and the restaurant does bear some of the responsibility; you can’t blame customers for buying what’s on order any more than you can blame restaurants for selling what customers will buy. Times have changed, and take out is no longer limited to pizza. You can choose to eat at restaurants that don’t do take-out, reward them with your business and tell them why, if you don’t want to see take-out business, right? I’m not sure but that might be limited to expensive fine dining at this point. Still, the only way you’ll curb the take-out take-over is if restaurants can make more money on dine-ins, and that sounds like a tall order. Or worse, a ship that’s sailed.
Thanks, but like the movie theater vs streaming video at home, my living room is far more comfortable and I don't have to wear pants.
Your delivery driver really wishes you’d keep a pair nearby for their brief interaction.
If the comment reflects the culture of the people sitting and eating at the bar, a preference to forgo sitting and eating at the bar seems quite rational to me.
I'm not a regular/local. Why would I go where I am not welcome?
If I owned the restaurant, why would I cater to an unwelcoming crowd?
I'm not a regular/local. Why would I go where I am not welcome?
If I owned the restaurant, why would I cater to an unwelcoming crowd?
Ridiculous, you can't force user behavior like that. Have the restaurants and what not entice you to stay.
The fact that sitting in at a nice cozy almost 100 year old bar and talking to your neighbors does not entice you is the problem I'm attempting to fix with a little good ol' fashion social shaming.
Nothing against people who like to chat with random strangers at a bar; that's perfectly fine. But no, sorry, it does not "entice me". I find it tiresome and distracting. I typically will only sit at the bar if I'm with others. If I'm by myself, I'd prefer a quiet table.
I prefer to talk to my loved ones at home, usually? What's the use case for eating alone at a restaurant anyway?
Is this a serious question? Because you're hungry, want to eat, and can't or don't want to cook (e.g., traveling for work).
Sitting at a bar with other people, suddenly you are not eating alone.
It's called socializing. Some people enjoy such things.
Sitting at a bar with other people, suddenly you are not eating alone.
It's called socializing. Some people enjoy such things.
counterpoint: if you want to offer takeout at your restaurant it's on you to implement that correctly. if you can't do it right, don't offer it. takeout is for when I want to eat restaurant food at my house, full stop.
I'm not an academic economist, so what do I know, but I think the authors aare missing something else.
I think the productivity was in some part driven by minimum wage laws. At lower wages, developing, installing and maintaining ordering kiosks and smart phone ordering apps makes less sense, because fast food cashiers are so cheap. When fast food cashiers become more expensive (and the technology costs come down) kiosks and apps make more sense. The same amount of food sold without the cost of cashiers is the resultant increase in productivity.
So my theory in a nutshell was that cashiers added little value. Substituting capital for labor led to labor productivity gains.
I think the productivity was in some part driven by minimum wage laws. At lower wages, developing, installing and maintaining ordering kiosks and smart phone ordering apps makes less sense, because fast food cashiers are so cheap. When fast food cashiers become more expensive (and the technology costs come down) kiosks and apps make more sense. The same amount of food sold without the cost of cashiers is the resultant increase in productivity.
So my theory in a nutshell was that cashiers added little value. Substituting capital for labor led to labor productivity gains.
Well, the minimum wage laws are more or less constant, but the paper is able to examine inter-store variation:
> Within McDonald’s restaurants, for example, the locations with the largest increase in short-stay customers saw the most productivity growth.
> Within McDonald’s restaurants, for example, the locations with the largest increase in short-stay customers saw the most productivity growth.
One restaurant near me ditched its dine-in service entirely during COVID. They never went back; the dining area is now some odd mix of storage/prep/work area, and they're still take-out only.
Which is a bit sad; the dine-in area was a pretty cozy experience, and you'd get free tea with the meal. (It was a Japanese restaurant.)