Closed and short-staffed restaurants become a mounting problem

As the omicron variant continues to spread, everyone from small independent restaurants to McDonald’s either cut hours or reduced their services.
Restaurants closed pandemic
Photo courtesy of McDonald's

At a McDonald’s location in suburban St. Paul, Minn., signs tell prospective customers that the dining room is closed. It was similar at another location recently in Chicago. Meanwhile, a Minnesota Jimmy John’s closed early late one afternoon. As it was, its sign warned customers it was drive-thru-only.  

Throughout the country, customers are running into an extraordinary problem: Closed restaurants and shortened service hours. Sick workers staying home are exacerbating an already difficult shortage of labor for restaurants.

Chris Kempczinski, McDonald’s CEO, told the Wall Street Journal for a story over the weekend that the chain’s restaurants are open 10% fewer hours because of a lack of employees. Late last week, Starbucks sent a warning to its customers that its stores could be closed in the coming weeks, or short certain ingredients, because of uncertainties brought on by the omnicron variant.

“Never, ever, ever have I seen that,” John Gordon, a restaurant consultant out of San Diego, said in an interview. “This is the world’s leading coffee chain notifying their U.S. customers that, ‘Hey, we’re really not sure what’s going to be happening.’ It is just crazy.”

The omicron variant, and the current surge in infections, has wiped out some apparent progress the industry was making against the labor shortage in recent weeks.

According to Black Box Intelligence, online reviews mentioning restaurants being “short-staffed” or “understaffed” dropped “precipitously” in the second half of November into the first week of December. This was especially true at full-service restaurants.

Yet there were steep increases in complaints of understaffing in the last three weeks of December. By the last week of December, in fact, there were record numbers of complaints about understaffing in online reviews. The pattern was similar for fast-casual restaurants, though the increase was more muted. Limited-service restaurants didn’t quite hit peaks the sector hit in the fall.

The Independent Restaurant Coalition, meanwhile, said last week that 46% of independent restaurants cut operating hours on more than 10 days in December. Fifty-eight percent of operators said their sales dropped by more than half during that month.

The problem is hardly unique to restaurants. The omicron variant is spreading at a remarkable rate. According to the New York Times, there have been more than 700,000 confirmed cases of coronavirus for the past week—by far the highest since the outset of the pandemic in 2020.

That is leading to an extraordinary number of people calling in sick to work. The U.S. Transportation Safety Administration said Tuesday, for instance, that some 3,456 employees currently have active COVID-19 infections. Airlines have cut flights. Sports teams have postponed games and retailers have closed up shop early.

Mark King, the CEO of Taco Bell, said in an interview on Tuesday that his chain has seen “little spikes” with issues of shortened hours or closed dining rooms. But he also said the issues are no different now than they’ve been for the past four months. “The most common thing is to shorten hours at the fringes,” he said. “Close early in the morning or late at night and focus on lunch and dinner.”

That’s been a common refrain throughout the labor shortage. Restaurants facing staffing challenges have opened late or closed early. Or fast-food restaurants have focused on drive-thru business, which generates most of their business.

And not everyone is experiencing challenges. Multi-unit restaurants that can transfer employees from one store to another when there are staff shortages appear to have a better time. Dutch Bros CEO Joth Ricci said last week that his drive-thru coffee chain lost just less than 1% of hours due to COVID. He explained that operators at his company have been able to transfer employees when necessary.

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