Whether they are serving out burgers, pizza, or pancakes, major US restaurant chains are staffing shortfalls, and they anticipate that situation to continue. They have decreased the number of hours worked and streamlined procedures to stay up with their current personnel.
According to Chief Executive Officer John Peyton, staffing at the chain restaurants IHOP and Applebee’s Grill + Bar, both of which are owned by Dine Brands Global, is currently at roughly 90% of 2019 levels. This has been the situation for at least the last four quarters. He referred to it as the “new normal.”
IHOP, which is renowned for its 24-hour service, is reducing hours at 400 locations, or around 25% of its restaurants in the United States, since they are short on personnel for the overnight shift, according to Payton.
Since many had to lay off personnel during the first few days of the lockdown, restaurants are now faced with the sobering truth that they will be operating with fewer employees for longer periods of time as a result of the COVID-19 pandemic. In order to adjust to post-pandemic customer habits that favor kiosks, deliveries, and drive-through over cashiers at registers, businesses are now placing people where they are most needed and using technology to fill in the gaps.
Dine’s net profit margin for the second quarter that ended on July 3 was 10.1%, according to Refinitiv data. This is a decline of approximately 20% from the same quarter a year prior as growing labor and material expenses ate into profits.
Undoubtedly, recruitment has improved recently. According to US Bureau of Labor Statistics (BLS) data issued on August 5, the food and beverage industry added 74,100 jobs in July, the largest monthly rise since February.
According to restaurant managers, more people are applying for jobs and showing up to work once they had one.
Some claim that they are at or above their staffing levels for 2019 and that fast food is outperforming full service.
Chipotle claims this to its alluring compensation and perks, even though the majority of major chains similarly provide salaries and raises. The seasonally adjusted average hourly wage for all employees at eating and drinking establishments increased by around 18% in June. According to preliminary BLS statistics while it has only just kept up with inflation since February 2020 reaching $18.42.
Despite the wage boost, there are still around 635,000 unfilled positions in the business, which had a 5.1% decline as of July before the COVID-19 epidemic started, according to BLS data.
Early in August, the National Restaurant Association surveyed business owners and discovered that 65% lacked sufficient staff to satisfy demand.
With more than 1,000 US outlets and 20,000 total employees, Marco’s Pizza is short 2,200 workers, or 11% of its workforce, according to co-CEO Tony Libardi.
About 21 employees per store, down 12% from 24 per store in 2019, work at the 1,100 Burger King and Popeyes restaurants run by the franchise Carol’s Restaurant Group Inc., according to Anthony Hull, the chief financial officer of the company, in an earnings call on August 11.
New technology is being used by many restaurant businesses to make up for worker losses when possible and transfer workers to the locations where they are most required.
Franchisees are reportedly adding equipment that can speed up cooking, such as fryers with automatic filtration systems, according to Jose Sil, chief executive officer of Popeyes’ parent company Restaurant Brands International Inc. He claimed that it let staff members “really focus on what matters, which is serving the guest.”
According to BTIG analyst Peter Saleh, McDonald’s Corp. is testing drive-thru voice ordering at twenty outlets in Illinois. But according to Saleh, the accuracy was still just about 80%, falling short of the 95% needed for widespread adoption.
Brinker International Inc., the company that owns Chili’s Grill & Bar, wants to improve kitchen preparation.
Each day, the staff counts the shrimp that will be used in specific meals in advance, bags the portions, and stores them in the refrigerator. However, it could have been completed while the dish was being prepared.
“Why don’t we get rid of it and save millions of dollars in terms of labor that can be redeployed either to restaurants or potentially to the bottom line if we can change the number of hours deployed in the business?” Chief Executive Officer Kevin Hochman asked in a call to discuss the company’s financial results on August 14.
With 1,128 US Chili’s restaurants open 362 days a year, a labor-saving of one hour each day would increase the chain’s annual labor capacity by 408,336 hours.
According to Libardi, the privately held Marco’s Pizza uses innovative equipment to help cut and roll the dough, reducing the process from the initial seven to eight hours to just two hours daily.
He remarked, “We want to employ, and we are fully staffed, but we are permanently preparing for our inability to do so.
