Square’s Spring Quarterly Restaurant Report: Payroll Costs Increase for Bars, Fall for Quick-Service Restaurants
14 Mayo 2024 - 6:00AM
Business Wire
New Square insights uncover weekday happy hour
strength and alcohol preferences ahead of patio season
Today, Square released the latest edition of its Quarterly
Restaurant Report, which uses data across Square’s food and
beverage sellers to examine dining trends, along with shifts in
consumer spending and restaurant wages.
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Square data shows that payroll costs are
increasing for bars and full-service restaurants, and falling for
quick-service restaurants and cafes (Graphic: Square)
Full-service restaurants and bars see payroll costs
increase
Labor continues to be one of the biggest operating expenses for
restaurants. According to data from the Square Payroll Index, since
2017, average hourly earnings for restaurant workers have grown 66%
compared to 40% for retail workers as of April 2024.
When looking at payroll as a share of revenue, Square found that
payroll costs have grown faster in certain sub-sectors compared to
others. Payroll has increased for full-service restaurants and bars
since 2019, while conversely, cafes and quick-service restaurants
have seen payroll costs fall.
Ming-Tai Huh, Head of Restaurants at Square, shared: “Bars and
full-service restaurants rely more on higher-skilled employees who
perform hard-to-automate tasks, which increases payroll costs. It’s
the exact opposite situation for QSRs and cafes. These sellers can
more easily use technology to automate and streamline operations,
helping lower operating costs for front and back of house.”
Has Chicago already ended the tip credit?
Last year, Chicago approved an ordinance to end the tip credit,
raising the minimum wage for tipped workers. This change will raise
the minimum wage for tipped employees from approximately $9 to
$15.80 per hour for businesses with 21 or more workers. The first
increase will take place on July 1, 2024, happening every year
until 2028 when the law goes into full effect.
As of April 2024, Square found that 62% of restaurant workers in
Chicago are already paid a base wage of $15.80 per hour. Square
Payroll Index also shows that the median restaurant worker in
Chicago currently makes $16.12 per hour before tips and overtime,
or $21.70 including tips and overtime.
“Twenty two states have already raised their minimum wage this
year, with several more scheduled in the coming months. In
addition, a number of state and local governments are working on
similar bills to phase out tip credit,” said Ara Kharazian, Square
Research Lead and principal developer of Square Payroll Index. “In
an industry where profit margins are already tight, restaurants can
increase staff efficiency with technology. This helps free up their
time to focus on the customer-facing aspects of the business versus
manual, tedious tasks.”
Weekday happy hour stays strong, while restaurant volume
shifts to the weekends
Although many office workers continue to prefer remote and
hybrid-work schedules, Square data revealed that end-of-day happy
hour remains a priority. Based on restaurant and bar traffic
between 4 - 6 p.m., happy hour has remained resilient and is
slightly above pre-pandemic levels when comparing 2019 to 2023. On
the other hand, weekday lunch is down across the U.S. and all major
cities and has yet to recover to pre-pandemic levels.
Kharazian adds: “There’s a perception that consumers are cutting
back at restaurants, when in fact total spending has increased. The
bigger change is in consumer behavior. Before COVID, consumers were
going out more during the week to eat lunch by their office and
grab drinks after work. Now with remote work, restaurant spend has
shifted to the weekend and we now see that weekend traffic is at
its peak.”
Tequila and vodka battle for top spirit
The weather has started to warm up and consumers are heading
outside to soak up the beautiful weather and enjoy drinks with
family and friends. Square analyzed consumer appetite between two
summer cocktail staples – tequila and vodka. Results show that
while vodka is the overall winner, there are some cities that
prefer tequila.
In order, San Antonio, Los Angeles, and Miami have the strongest
taste for tequila, followed by Houston and New York City. Whether
it’s a moscow mule, margarita, or espresso martini, restaurants can
anticipate a busy season ahead. Square found that every year,
restaurant spend increases at the end of March as patio season
kicks off. Busy season continues until the beginning of September,
before a natural dip ahead of the holiday rush that spikes after
Thanksgiving.
About Square
Square makes commerce and financial services easy and accessible
with its integrated ecosystem of solutions. Square offers
purpose-built software to run complex restaurant, retail, and
professional services operations, versatile e-commerce tools,
embedded financial services and banking products, buy now, pay
later functionality through Afterpay, staff management and payroll
capabilities, and much more – all of which work together to save
sellers time and effort. Millions of sellers across the globe trust
Square to power their business and help them thrive in the economy.
For more information, visit www.squareup.com.
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