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The curious surge of productivity in U.S. restaurants

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

#221

Post by dehrmann »

horsawlarway wrote: post #185
wat10000 wrote: post #184

This seems really stupid. A restaurant sells two basic categories of product: food/drink, and service. Labor is expended on both. They’re ignoring service and only looking at food/drink. The split between these two products has shifted away from service. That means more labor is going into the thing they’re actually counting and less is going into the thing they’re ignoring. Wow, productivity went up! It’s interestin…

Yeah, Marketplace on NPR covered this yesterday and came to essentially the same conclusion. It's not that productivity is genuinely up, it's that modern restaurants are providing a different product. Takeout/delivery to eat on your couch has different economics than a full service restaurant. Phrasing it as productivity is disingenuous.

Nit: Marketplace is an APM show--essentially a competitor of NPR. "NPR" has just become shorthand for "public radio."

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

#222

Post by dehrmann »

wat10000 wrote: post #184

This seems really stupid. A restaurant sells two basic categories of product: food/drink, and service. Labor is expended on both. They’re ignoring service and only looking at food/drink. The split between these two products has shifted away from service. That means more labor is going into the thing they’re actually counting and less is going into the thing they’re ignoring. Wow, productivity went up! It’s interestin…

What it's really saying is we need a better metric now that front and back of house have decoupled.

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

#223

Post by brians »

dehrmann wrote: post #221
horsawlarway wrote: post #185

Earlier quoted context omitted.

Yeah, Marketplace on NPR covered this yesterday and came to essentially the same conclusion. It's not that productivity is genuinely up, it's that modern restaurants are providing a different product. Takeout/delivery to eat on your couch has different economics than a full service restaurant. Phrasing it as productivity is disingenuous.

Nit: Marketplace is an APM show--essentially a competitor of NPR. "NPR" has just become shorthand for "public radio."

Also Marketplace airs on NPR stations. I have Windows on a Dell, and I hear Marketplace on NPR.

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

#224

Post by mediaman »

wat10000 wrote: post #184

This seems really stupid. A restaurant sells two basic categories of product: food/drink, and service. Labor is expended on both. They’re ignoring service and only looking at food/drink. The split between these two products has shifted away from service. That means more labor is going into the thing they’re actually counting and less is going into the thing they’re ignoring. Wow, productivity went up! It’s interestin…

If you read the paper, they explicitly define "productivity" as real sales per employee. Your point about service versus food would be valid except that, apparently, they weren't being paid well for the service, because real sales went up per employee as a function of reduced dwell time. That means that service was a low productivity offering.

That you can explain the increase in productivity by shift in mix from low-productivity to high-productivity products is, in fact, the entire point of the paper, and does not mean that a "surge in productivity" did not happen.

The authors point out that a change in consumer demand preferences is in fact a type of "technology" in that it can be a driver of sector productivity. Not all technology lives on circuit boards!

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

#225

Post by borgdefenser »

UltraSane wrote: post #85
tayo42 wrote: post #80

Earlier quoted context omitted.

Eating out seems less popular in the the US right now. Everything is more expensive and there's the 18-25% tip that gets applied. Going out to even a basic lunch with my wife is close to 50 usually for the meal. Takeout I can tip the delivery person a little less. And keep left overs a little easier. Take out is only for being lazy, I'd still just cook and meet or beat in quality any restaurant except ones that mignt…

most restaurants are absolutely terrible value for money.

The whole restaurant experience forced me to get more into cooking for myself because the value is just not there.

Low and behold it is actually fun to cook. It is actually more fun to be able to make a new dish yourself than to try a new restaurant. It is amusing how everything DIY is cool in hacker culture besides cooking. For no reason besides custom, people pretend they just don't have time to cook or that learning to cook isn't worth it. It is an obviously thoughtless idea.

Having less time to doom scroll your phone is a feature and not a bug.

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

#226

Post by doctorpangloss »

ForOldHack wrote: post #215
doctorpangloss wrote: post #173

Earlier quoted context omitted.

Take out is terrible for restaurants. All the profit is in alcohol which people rarely take out. In distant second, profit comes from understaffing. So it should be obvious how and why productivity rises: in the absence of lucrative dine in drinkers, understaff. Then the denominator in the productivity calculation is smaller.

Where does the profit from subsidies go to? A few years ago, McDonalds has subsidies of $1.5B USD, and $1.5B in profits. They really are a real estate company, and nursemaids for broken ice cream machines.

McDonalds corporate and its franchises are not real estate businesses. I understand there are insight porn Substack writings saying so. The locations of a McDonalds doesn’t change but same store sales fluctuate a lot. They suck because the food sucks, and it got too expensive for its audience of people who eat shitty food. This is not at all an unorthodox opinion. The real estate idea is the unorthodox one.

I am not sure which subsidies specifically you are talking about but you are probably right that the fact that they pay their workers so poorly relative to others in hospitality, and that the services their people need are paid for by taxpayers in their communities instead of McDonalds, is a subsidy that is relevant to their bottom line. But, since I don’t know how comparable they are to SMB hospitality, it’s really hard to say. One POV is that McDonalds is the addictive thing that competes against alcohol, and maybe it has gotten less addictive, or it faces cultural headwinds like smoking did.

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

#227

Post by dataviz1000 »

jancsika wrote: post #217
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…

> Increase in takeout is an increase in efficiency for each line cook and emnployee. There's also a kind of precarious food-business "art" going on behind your anecdote that follows the sentence I quoted (long line, but "not too long," etc.). In your single-minded speculation about the efficiency of takeout that art isn't present. That art is the difference between this legendary Pacific Grove restaurant on the one h…

Art is one thing.

Business is another.

"You can make the best soup in the world, but if you takes all day to make it, you will never make a dollar in this business." -- German chef

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

#228

Post by rescbr »

randerson wrote: post #74
6stringmerc wrote: post #70

Earlier quoted context omitted.

Because drones are noisy and irritating in reality and nobody wants them flying around their neighborhood and they don’t scale and they can potentially scare animals and and and…

And they can't press buttons in the elevator. I don't think any delivery service will take off in a city if people have to leave their apartments.

This is very much location/culture dependent. Where I live is customary for the delivery drivers to wait on the sidewalk while you go down to pick the order up.

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

#229

Post by mediaman »

nostrademons wrote: post #214
wat10000 wrote: post #184

This seems really stupid. A restaurant sells two basic categories of product: food/drink, and service. Labor is expended on both. They’re ignoring service and only looking at food/drink. The split between these two products has shifted away from service. That means more labor is going into the thing they’re actually counting and less is going into the thing they’re ignoring. Wow, productivity went up! It’s interestin…

Another effect they're glossing over is inflation. They're measuring real labor productivity ((dollars generated / inflation) / hours worked), but usually the way you measure inflation in that equation is to plug in some society-wide metric like the CPI or GDP deflator. By most accounts restaurant inflation has gone up more than overall CPI inflation; at least, I'm spending $120 on a meal that would've cost $80 pre-p…

No, they're not glossing over inflation, because they were able to explain nearly the entire difference in real sales per employee between restaurants during the same time as a function of dwell time.

They are not just looking at an overall increase in sales, misunderstanding sector-specific inflation, and saying it must be dwell time.

It's a good paper! I would encourage reading it. They have specific dwell time data per location, along with sales data, and explain the difference in productivity by looking at differences in productivity between restaurants over the same time period, find that it is determined by changes in dwell time, and then find that the overall mix shift of reduced dwell time explains the overall change in real sales per employee across the sector. Inflation is not the explanation.

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

#230

Post by borgdefenser »

bsder wrote: post #127
walthamstow wrote: post #123

Earlier quoted context omitted.

Especially if you're anything above a 7/10 home cook

It's funny that they say productivity is up when all of my local restaurants seem to be slower than ever ... but I digress. > Especially if you're anything above a 7/10 home cook I'd move your assessment down to a 5/10 home cook. Most restaurants are using ingredients of sufficiently low quality that it is now pathetically easy to beat them on that axis. Using even slightly better ingredients than average puts you ah…

Cooking is also a skill that is easy to improve on and not an inborn genetic property that someone has or doesn't have.

The way people that don't cook talk about cooking you would think it is on the level of work involved in roofing or pouring cement blocks.

I am literally cooking a Thai dish right now. I could have went to the Thai restaurant but tinkering with this dish is actually more fun.

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