The restaurant industry is remarkably more efficient than it was before the pandemic.
Restaurant sales rose 0.3% in September from August, according to federal data released Friday, maintaining its recovery despite a host of challenges from labor shortages keeping doors closed to a lack of supplies making it difficult to source things like chicken and takeout containers.
Restaurants generated $72.4 billion in sales in September, according to retail sales data from the U.S. Census. That’s about 10% above the sales level in the same month in 2019, a remarkable recovery from a pandemic that at one point drained the industry of more than half of its business.
The industry is doing this with fewer locations and many fewer workers. Restaurants employ about 1 million fewer people than they did before the pandemic. Meanwhile, thousands of locations have not reopened. And many are operating with shortened hours or closed dining rooms.
So far this year, restaurants have generated $602.6 billion in sales, up 30.5% over the same period a year ago.
By contrast, the U.S. Census Bureau recorded $623 billion at restaurants and bars for all of 2020.
Food services and drinking places sales recover
Source: U.S. Census Bureau
Much of the industry’s recovery has come in the form of higher prices. Overall, restaurant menu prices are up nearly 9 percent over the past two years.
Also, consumers are ordering more food per order. According to Black Box Intelligence, checks rose 14.2% in September versus the same month in 2019. That’s the highest growth since the research firm began collecting the data more than a decade ago.
Higher prices and larger orders aren’t the only things that have made the industry more efficient. The rapid surge in sales through drive-thrus, mobile orders and delivery have all enabled restaurants to do more with less.
Generally, a takeout order is more efficient than a dine-in order because it takes less effort to provide that meal.
As Juan Martinez, principal with the consulting firm Profitality, told me for this story on balancing digital and in-person orders, takeout is the most profitable form of business in a restaurant. “You don’t have to take their order, you don’t have to make change. They just pick it up and leave. It’s beautiful,” he said.
Still, restaurants are getting more sales through fewer customers and with fewer workers. That is in some respects more optimal for operators than it seems—despite the obvious challenges of labor and supply chain issues—which has played out in greater profitability this year.
The key question is how long this lasts. A more normalized environment, where customers go inside more often or make smaller orders or start shifting toward value offers, could cause greater challenges for operators, especially if the labor problems don’t go away.
For now, however, the industry has recovered its lost sales with a lot fewer people who are getting higher pay in the process. The pandemic has transformed restaurants in less than two years.