Manager turnover has remained high, how - ever. “It changed the mindset for a lot of peo- ple,” said Victor Fernandez, chief insights of- ficer for Black Box Intelligence. “Other things became more important. Work-life balance, what you’re doing with your life and who you spend your time with. There’s a lot more options. Money is a factor. But others offer more flexibility.” The industry also added more technology. It remains behind a lot of other industries in terms of in-store technology, but restaurants are catching up. Automation of more process- es has become more common. AI software can do scheduling, manage inventory and take orders in the drive-thru. Mobile ordering has become particularly popular. More than 30% of transactions at Starbucks, for instance, now come through the chain’s mobile channels. Wingstop gets 70% of its sales through digital channels. Most major chains have driven substantial growth in recent years through their mobile app. All that has made the industry more effi - cient. In January 2020, restaurants generated just over $5,000 in revenue per employee that month. This January it was just under $7,400—a difference of 46%. Adjusted for price increases, restaurants are 16% more ef- ficient than they were five years ago. Some of that efficiency can be attributed to this: Takeout is a lot more popular. Accord- ing to the National Restaurant Association, 73% of traffic in January of this year was for consumption outside the restaurant. In 2019 that was 65%. DINING ALONE That hasn’t been the boon to limited-service restaurants that you might think it is. In De - cember of last year, limited-service restau - rants generated 48% of total restaurant sales. That’s about the same level as in February 2020. Instead, more types of restaurants are ca- tering to the off-premises consumer. Half of operators—no matter the service style—told the National Restaurant Association that they are getting more orders for takeout and deliv - ery than they did five years ago. A lot of that is due to delivery. Transac - tions for delivery have more than doubled over the past five years, from 4% in 2019 to 9% last year. That means full-service inde - pendent restaurants that had been built for dine-in service are now gathering orders for third-party delivery. But it’s not just delivery. Drive-thru now represents 35% of sales, up two percentage points compared with five years ago. Drive- thru sites are the most in-demand real estate in the restaurant industry. Five years ago,
SHARE OF RESTAURANT TRAFFIC Since 2019, off-premises traffic has taken share from on-premises traffic. Here’s the change, plus the change in type of off-premises traffic.
drive-thru-only concepts were almost un - heard of, outside of struggling Checkers and Rally’s and a few innovative coffee concepts in the Pacific Northwest. Today, some of the industry’s fast- est-growing chains are drive-thru-only, in - cluding Dutch Bros and 7 Brew. Many existing chains are testing drive-thru-only locations, such as Jack in the Box and even McDonald’s. “Everybody recognizes that off-premise is a big part of the business and will forever be a big part of the business, and we’ve got to embrace it,” Fernandez said. What people do with the food when they get it is also changed. Thirty-two percent of customers dine by themselves, up from 26% in 2019, according to Technomic. And people aren’t even going home. “Car consumption has skyrocketed and not let up since the pan- demic,” said Robert Byrne, senior director of consumer research for Technomic. “We talk about the road trip daypart. It’s now less about, ‘get your food and go park somewhere and eat it.’ It’s more about people just enjoy eating in their car.” WORKING FROM HOME Downtown Minneapolis has an often-confus - ing network of skyways between office build - ings, which were built so people wouldn’t have to go outside during the frigid winter months. Those offices traditionally empty at lunchtime, filling the skyways with hungry office workers, which supplied a generation of restaurants lining those skyways with plenty of business. These days, those skyways don’t get so crowded, particularly on Fridays. And the number of restaurants has diminished. The pandemic permanently increased the percentage of people who spend at least some
time working from home. Before the pandem- ic, less than 6% of people worked from home, according to the U.S. Census. These days, 13% of employees work from home full time, according to the data firm WFH Research. Nearly 26% of workers have some hybrid arrangement where they work from home part of the week. That has changed the equation for a large group of restaurants that were geared in part to serve those areas. Consider the flurry of restaurant chain bankruptcies in 2024. Just about every one of the restaurant chains that filed for bankrupt - cy in 2024, and so far in 2025, has mentioned the pandemic as a major cause. Yet most of the bankruptcy filings were of fast-casual brands, such as the Mediterra- nean chain Roti and Mexican chains Rubio’s and Tijuana Flats, that had targeted more ur- ban areas. Those sales faltered as more people worked from home, draining lunch business, and as Americans left urban markets alto- gether. That said, the full-service sector has clear - ly struggled. Among Top 500 chains, fast- casual chains now generate more sales than do full-service concepts, despite those smaller chains’ challenges. Full-service chains haven’t regained traffic lost during the pandemic. “Traffic continues to go down on a same- store basis,” Fernandez said “So maybe your dollars are up, but the people you’re serving through your restaurant is down compared to where it was five years ago.” WHAT IS A RESTAURANT ANYWAY? The pandemic has had other, more subtle im- pacts on the industry, in some cases involving
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RESTAURANT BUSINESS APRIL 2025
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