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The curious surge of productivity in U.S. restaurants

bfi.uchicago.edu

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Re: The curious surge of productivity in U.S. restaurants

#191

Post by PopAlongKid »

freddie_mercury wrote: post #165
mlsu wrote: post #101

Earlier quoted context omitted.

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.

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.

Re: The curious surge of productivity in U.S. restaurants

#192

Post by casey2 »

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

Re: The curious surge of productivity in U.S. restaurants

#193

Post by casey2 »

j_timberlake wrote: post #69
deathanatos wrote: post #19

> 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…

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 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

Re: The curious surge of productivity in U.S. restaurants

#194

Post by Aurornis »

dataviz1000 wrote: post #156

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…

> 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.

Re: The curious surge of productivity in U.S. restaurants

#195

Post by pests »

ggzzzzzz55 wrote: post #137
msravi wrote: post #130

Earlier quoted context omitted.

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.

Re: The curious surge of productivity in U.S. restaurants

#196

Post by ForOldHack »

msravi wrote: post #130
deathanatos wrote: post #19

> 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…

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.

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 ).

Re: The curious surge of productivity in U.S. restaurants

#197

Post by dataviz1000 »

Aurornis wrote: post #194
dataviz1000 wrote: post #156

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…

> 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…

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

Re: The curious surge of productivity in U.S. restaurants

#198

Post by dboreham »

kharak wrote: post #166
dataviz1000 wrote: post #156

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…

What about the additional costs for delivery and online platforms? Both only apply for delivery and are quite significant. Takeouts should reduce costs, but delivery has significant costs added to each order.

Those are mostly passed on to the customer, no?

Re: The curious surge of productivity in U.S. restaurants

#199

Post by lukeschlather »

BriggyDwiggs42 wrote: post #22
knowknow wrote: post #21

Earlier quoted context omitted.

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.

Re: The curious surge of productivity in U.S. restaurants

#200

Post by dboreham »

colonial wrote: post #65
alwa wrote: post #36

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.…

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?!

Young people?
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