During the height of the COVID-19 pandemic, many people who couldn’t eat out at a restaurant—because of stay-at-home mandates or safety concerns—ordered in instead.
The increase in orders for takeout or delivery has carried over and fueled a “curious surge” of productivity in United States restaurants, suggests research from the University of Chicago Booth School of Business.
This represents a big change for the restaurant industry, wrote professors Austan Goolsbee and Chad Syverson, who conducted the study along with Booth research professional Joe Tatarka and New York University Ph.D. student Rebecca Goldgof. That’s because the sector’s real labor productivity—a measure of how much can be produced by a given number of workers—was flat for nearly 30 years before the pandemic, even as productivity across the rest of the economy grew steadily.
The industry employs about 7% of private-sector nonfarm workers in the United States.
On its face, COVID-19 was terrible for restaurants—at least at first. Productivity fell by more than 20% in early 2020, according to the study, which measured productivity using employment data and monthly real sales per employee from 1992 to January 2025.
By early 2021, however, productivity at restaurants had soared to 15% higher than pre-pandemic levels, meaning the average restaurant saw 15% more inflation-adjusted sales per employee. The swing is evident even when productivity is measured as the total increase in consumer visits per employee, the study noted.
This surge in productivity has persisted, the study found, as has the uptick in the number of visits by take-out customers, defined as patrons who spend 10 minutes or less in a restaurant. The researchers tracked customer visits and spending at more than 100,000 fast-food restaurants across the country using cell phone data from geospatial data company SafeGraph.
“This relationship between shorter dwell times and productivity growth is present in both industry-wide trends and in restaurant-level patterns.”
The dataset includes the number of monthly customer visits to restaurants between January 2019 and December 2022, wait times and the times of day the visits occurred. It mostly covers national chains such as McDonald’s, Chick-fil-A, Taco Bell, Wendy’s and Burger King, using SafeGraph debit and credit card transaction data from that period.
The productivity increase did not result from employees working longer hours, according to the study. By January 2025, workers were putting in about 25 hours per week on average, 30 minutes less than the pre-COVID average. The increase was also not due to the effects of growing restaurants hiring more workers and benefiting from economies of scale, because average employment per restaurant was slightly smaller than it was before COVID. The researchers also rule out price increases due to market power gained by restaurants that survived the pandemic.
As to what did increase productivity in the industry, the data point to a particular factor: dwell time, or how long customers spend in an establishment.
At the start of the study sample, about half of customer visits had been short, or less than 10 minutes. That jumped to about 60% when the pandemic began, and as of 2023 was slightly higher than that.
These shorter visits mostly replaced those lasting 21–60 minutes, according to the study. Industry data back up the findings. The use of delivery apps such as Grubhub surged at the same time as the rise in short visits and hasn’t fallen since.
The researchers don’t know exactly why shorter dwell time has made restaurants more productive but have some ideas: If you order a meal for takeout or delivery, the study notes, the restaurant doesn’t have to clean up your table or do your dishes.
Likewise, if you pay online with a credit card or order using an in-store kiosk, employees aren’t waiting on you at the counter or the table. Instead, restaurant staff focus on the basics of making food and offering ready-to-grab take-out orders.
“This relationship between shorter dwell times and productivity growth is present in both industry-wide trends and in restaurant-level patterns,” the researchers write.
They call the surge in productivity “striking” and suggest it could be worth looking into whether other industries, particularly in the service sector, may have experienced a similar burst.
Citation: Austan Goolsbee, Chad Syverson, Rebecca Goldgof, and Joe Tatarka, “The Curious Surge of Productivity in US Restaurants,” Working paper, March 2025.
— Adapted from an article that was first published on the Chicago Booth Review website
