Is the lunch rush gone for good?

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Organizations are increasingly requiring employees to return to the office. However, after years spent working from home, this push may be coming too late to save the lunch hour.

The lunch hour has long been a ritual in corporate America. This time-honored tradition was a vehicle for closing deals, building camaraderie, and celebrating milestones. It is the kind of touch point that was sorely missed when millions of employees began working from home in 2020.

Despite widespread efforts to return to normal, the restaurant industry is still fighting to recover from the pandemic. At this time last year, there were fewer restaurants in the US than there were in 2019 and growth is expected to be slow.

While urban eateries were hit particularly hard by the loss of weekday traffic, the suburban restaurant landscape flourished by comparison. Many existing restaurants saw a boon in orders from neighbors who were now working from home. Some restaurants and renowned chefs even followed their diners out of cities.

The downtown restaurants that were able to weather COVID have waited years for workers to come back to their offices, and their favorite daytime dining rooms. But, now that return to mandate offices are increasing, they have a new reality to contend with: the lunch rush might not be coming back as quickly.

There are a number of factors contributing to this shift. The first is simple math — since many offices are only requiring staff to come in part time it is impossible for restaurants to earn the same amount they did when people came in five days a week.

And, as restaurant prices rise, and other economic pressures loom, workers may not be as willing to spend money eating out at lunch.

There are also some generational trends shaping lunchtime.

A recent study found that Gen Z workers are less likely to take lunch and, when they do, they take the shortest breaks.

When you stop to consider that Gen Z began entered the workforce when their offices were also their (or their parents’) living rooms, these tendencies make sense. They never had a team lunch, let alone the opportunity to find their favorite sandwich spot around the corner.

Despite these influences, the outlook may not be as dire as it seems.

Today, lower income individuals are more likely to skip dining out. So, as they work their way up the ladder and gain spending power, Gen Zers will almost certainly evolve their buying behaviors.

At the same time, menu-price growth has been decelerating for the past ten months. And while prices are still rising at a higher rate than grocery costs, this is an indicator that budgetary concerns could soon be abated across generations.

Also, millennials have been found to spend the most money on lunch, primarily as a tradeoff for saving time. As Gen Z begins to interact more with their older coworkers in the office there is a good chance that they will warm to these efficiency-minded practices.

With these insights in hand, it would be alarmist to say that the lunch rush will never return. But I think it will certainly take some time and may look different than it did before COVID.

To stay relevant — let alone profitable — I would advise restaurants to take a cue from their desired diners and evolve beyond the traditional power lunch. Offer specials that make meals more affordable. Expand takeout and delivery offerings. Launch loyalty programs. Adjust hours to be more flexible to varying meal or snack times. Perhaps even explore getting into another office staple: happy hour.

As a restaurant investor, there is a mantra I try to keep in mind: people will always need to eat, it’s our job to make sure they want to eat here. So, let’s get to work.

Danilo Diazgranados is an independent investor in the global food and wine, financial services, real estate, and the hospitality sectors.

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