On October 17, 2022, Datassential analyzed the operating hours of hundreds of thousands of restaurants in the U.S. They compared these operating hours to October 2019, before the pandemic struck. The results: Restaurants have reduced their hours by an average of 7.5% nationwide, amounting to about 6.4 fewer hours they’re open to the public each week.
The Changing Restaurant Landscape
An unprecedented worker shortage and rising food costs have transformed how restaurants operate. It’s changed its recipes, menu selections, and hours of operation. The analysis found that over 58% of U.S. restaurants have reduced their operating hours since 2019, with casual dining restaurants experiencing some of the greatest reductions, amounting to about 8.9 hours each week. Today, many more restaurants close by 8 p.m. or 9 p.m. compared to 2019.
The Last Frontier, otherwise known as Alaska, is the only state that has seen expanded hours of operation for restaurants—2.7 hours each week. The states with the most significant reduction all fall on the Eastern Seaboard and include New York, Maine, Vermont, and Washington, DC, with reduced weekly hours ranging from 9.5-12.5.
When Datassential took a bird’s eye view of neighborhoods, the River North area of Chicago saw the biggest decline, with lost weekly hours averaging just over 20. This was followed closely by three neighborhoods in New York City: Chelsea, Meatpacking District, and the Theater District, all with 19-plus reduced hours. About 12 of the 15 neighborhoods with the greatest reduction in restaurant operating hours are found in New York City.
The Reason for Reduced Operating Hours
Undoubtedly, the number one reason is the worker shortage that has left some positions unfilled. However, demand has also impacted restaurants’ hours as the growing hybrid workforce reduced daytime and after-work traffic, particularly in business districts.
The analysis also found that the current environment has been particularly challenging for independent restaurants, which averaged a little over 10% decline or 7.5 hours each week. Comparatively, restaurant chains with 51-500 locations experienced a drop of 5.6 operating hours each week, and those with over 500 units saw just four reduced hours.
That said, some restaurant chains saw a reduction in operating hours far above the national average. These include Denny’s, with just over 30 hours each week; Texas Roadhouse, losing around 21 hours a week; IHOP, coming in at a loss of 17.7; and Subway missing out on 16 hours weekly. Surprisingly, Wendy’s showed an increase in operating hours, averaging over 21 hours each week. Some of these restaurants have noted increasing difficulty finding staff for late-night shifts.
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Why are so many restaurants short-staffed?
The disruption brought on by the pandemic led to restaurant operators laying off staff as their doors closed and social distancing continued. Once the restaurants reopened, they found that some employees had accepted jobs in other industries and were not returning to hospitality. They cited better working hours, less stress, greater earnings, and more dependable schedules.
Despite restaurants’ attempts to remedy some of these issues, staffing problems have persisted, and some consider this environment the “new normal.” Keep in mind that the restaurant industry is still showing signs of improvement, with food services and drinking places adding about 60,000 jobs in September 2022.
According to Reuters, IHOP, the one-time pinnacle of the 24/7 dining experience, is shortening hours at about 400 locations, or approximately one-fourth of its U.S. restaurants, due to a shortage of overnight shift workers. Some restaurants, such as Chipotle Mexican Grill, report staffing levels at or above their 2019 levels, crediting higher wages and increased benefits.
Where are the biggest employee shortages?
While organizations across the country are experiencing labor shortages, some of the top industries reporting workforce challenges include retail, manufacturing, and leisure and hospitality.