Restaurants are closing early due to fewer employees and customers

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No reservations. Restaurants are cutting hours and closing early amid employee and customer crunch

Tough getting a reservation lately at your favorite restaurant — or any restaurant for that matter? Across the nation, restaurants are open fewer hours and closing earlier.

Nearly 4 in 5 restaurants nationwide have reduced their hours since 2019. They’ve done so by an average of 6.4 hours (7.5 percent), according to a recent Datassential report. Restaurants that were once open until 10 or 11 p.m. are now open until 8 or 9 p.m. Washington, D.C., Vermont and Maine topped the list of states where restaurant hours have declined the most; Alaska was the only state that actually saw restaurant hours increase.

There are two main reasons, Sean Jung, an assistant professor at the School of Hospitality Administration at Boston University, told Grid.

One: There aren’t as many customers — and those who are coming aren’t night owls

Wait, aren’t a good chunk of us putting on actual clothing (other than sweats) and heading back to restaurants to eat? Yes, but not all of us. Compared to pre-covid numbers, consumer demand for restaurants has declined, especially in areas closed down during the pandemic, Datassential reported.

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And clearly we all need to work on our staying-out stamina again because late-night restaurant hours aren’t popular anymore either. Although to be fair, they may never have been. Those later seatings were often accommodating patrons trying to get into a restaurant, who didn’t get that 7 p.m reservation in time, said Jung.

Peak restaurant hours are generally 11 a.m. to 1 p.m. and 6 to 8 p.m., he said. Back when demand for dining in was higher, many people reserved tables during that evening rush, pushing others into later dining hours. To accommodate that, restaurants might have been open until 10:30 p.m. With less demand, those who might have eaten later can now secure a table during that two-hour window.

“You just don’t have those people sitting in their restaurants anymore,” he said. “There’s no reason for them to open late.”

Inflation is at least part of the equation keeping customers away, said Jung.

One of the most well-known leisure goods that we have is basically eating in a restaurant. Fewer people are going out to eat in large part because it costs more. Instead, they can find lower food prices at the grocery store, he added.

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In a recession, he said, that demand for dining out would decrease even more.

Not enough interest in working in the restaurant industry

The other issue: worker shortages. Currently, there’s roughly two jobs for every one employee willing to work in the industry, Jung said. A major reason for that is that many employees don’t feel the hourly pay in restaurant work accommodates the stress of the job.

Measures like Washington, D.C.’s Initiative 82, which raises minimum wages for restaurant workers, were passed in the most recent election. The new law attempts to address some of these wage issues in the restaurant industry.

A handful of states and localities have passed measures to increase base wages for tipped workers, but it’s unclear what impact they might have and whether they’ll attract more workers.

Initiative 82 gradually increases the base wage (currently $5.35 per hour) for tipped workers until it matches the hourly minimum wage of $16.10 for non-tipped workers in 2027.

This isn’t the first time the city has passed such an initiative, having previously passed and repealed Initiative 77 in 2018.

The way it works in most states is that tips make up the difference between the base pay from restaurants and the minimum wage for all workers, which leaves room for wage theft (something the National Restaurant Association has argued is overreported). Now, employers will pay the full wage. Servers can still make tips on top of that.

Given how controversial this policy is, it remains to be seen how effective it will be. Proponents say the measure will reduce wage theft and increase pay (which could reduce worker shortages), while opponents are concerned that it may squeeze independent restaurant owners and reduce pay for the many servers whose wages, with tips, outpace minimum wage, Eater reported.

While the initiative by no means bans tipping, some restaurant owners may add a service charge, which goes to the business owners, to checks, Eater reported, since some customers are “less likely to balk at that” than pricier menu items.

But the service charge itself can also be unpopular among workers, since patrons are less likely to tip on top of that, DCist pointed out in a recent article.


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Restaurants are still pulling in money

Still, it’s not all bad news. Restaurant sales haven’t exactly taken a huge nose-dive in the past year. Sure, last year, industry sales, totaling $799 billion, hadn’t fully recovered to their 2019 level of $864 billion. But this year’s sales were projected to hit $898 billion, according to the National Restaurant Association’s 2022 State of the Restaurant Industry report.

Part of the reason? Increasing menu prices.

Rising restaurant prices doesn’t mean restaurants are raking in the cash, said Jung. For the most part, restaurants have had to raise prices to account for the rising cost of ingredients. As a result, revenue is more or less on par with pre-pandemic figures, while customer turnout and profit remain comparatively lower, he said.

The future of dining hours

Restaurant operating hours likely won’t return to pre-pandemic levels in the near future. For anything to change, both consumer demand will need to increase and shortages to be reduced, Jung said.

But given the current trajectory of high inflation and increasing interest rates, demand will likely stay the same or decrease, and the industry likely won’t attract more employees until higher wages are put in place on a wider scale, he said.

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If you’re starting to get “hangry,” there are a handful of popular fast food options that have actually increased their hours, including Wendy’s and Crumbl Cookies.

But if you’re looking for something even a little more refined, the bottom line is that worker shortages would need to lessen, and consumer demand would need to increase for operating hours to expand — and that might take a few years.

Thanks to Alicia Benjamin for copy editing this article.

  • Anna Deen
    Anna Deen

    Data Visualization Reporter

    Anna Deen is a data visualization reporter at Grid.