Restaurant Productivity Revolution

Kitchen Constraints in the Takeout Era

Restaurants have long been considered a productivity-challenged industry. For decades, the amount of sales generated per employee barely budged, with conventional wisdom suggesting that serving food simply requires a certain amount of human labor that can't be easily reduced. That conventional wisdom, however, has been upended in recent years as restaurants have experienced an unprecedented surge in productivity. According to a recent study by the National Bureau of Economic Research (NBER), restaurant productivity has jumped by approximately 15 percent since the pandemic – a remarkable shift after decades of stagnation.

What's behind this productivity leap? The study suggests that the answer isn't some revolutionary kitchen technology or radical staffing models, but in a fundamental shift in how customers engage with restaurants. This shift presents both immediate opportunities and looming challenges for restaurant owners – particularly in how they manage their most constrained physical resource: the kitchen.

The Productivity Surge: Numbers Tell the Story

The data presented in the NBER study shows that after nearly three decades of flat productivity (from 1992 to 2019), restaurants suddenly saw real sales per employee jump about 15 percent higher than pre-pandemic levels – and this elevated productivity has persisted. This surge represents approximately 20 percent higher real sales with only about 5 percent more employees compared to pre-pandemic averages.

Source: Census Monthly Retail Trade Survey and Bureau of Labor Statistics data

This wasn't achieved by employees working longer hours either. Average weekly hours in the industry from July 2022 through June 2024 were 25.1 – the same as in 2006-2008 when the data series began, and actually slightly below the 2018-19 pre-COVID average of 25.6 hours per week.

What makes this productivity jump particularly interesting is that it happened across the industry, from major chains to independent operators, with limited-service restaurants (quick-service and fast casual) showing especially dramatic gains.

Behind the Productivity Gains: The Takeout Revolution

The key driver behind this productivity surge becomes clear when examining detailed data on customer behavior: people are spending significantly less time in restaurants.

Source: Analysis of SafeGraph mobile phone tracking data for limited-service restaurants, 2019-2022

According to mobile phone tracking data analyzed in the study, the percentage of restaurant visits lasting less than 10 minutes jumped from around 50 percent before the pandemic to over 60 percent by the end of 2022. This shift wasn't driven by restaurants providing faster service for dine-in customers – it reflected the massive growth in takeout and delivery orders.

Several factors contributed to this takeout revolution:

1. Digital ordering platforms: The widespread adoption of restaurant-specific apps and third-party delivery platforms made ordering for pickup or delivery significantly more convenient.
2. Changed consumer habits: The pandemic forced customers to embrace takeout, and many discovered they preferred the convenience even after restrictions lifted.
3. Kitchen-focused operations: Restaurants adapted by streamlining their operations around preparing food rather than managing dining rooms.
4. Menu optimization: Many restaurants simplified their menus to focus on items that travel well and can be prepared efficiently.
5. Reduced front-of-house staffing: With fewer dine-in customers, restaurants needed fewer servers, hosts, and bussers for the same sales volume.

The shift away from "front-of-house" can take many forms. If you're a fan of "The Bear" like I am (one of my favorite TV dramas of all time), we saw a flabor of this play out when they implemented a dedicated to-go window. This smart adjustment to drive sales to a different type of customer behavior mirrors what successful restaurants have been doing in the real world – creating specific pathways for takeout that don't interfere with the dine-in experience.

This transformation effectively means restaurants are serving more customers with fewer labor hours because the takeout/delivery model requires less service labor per order. When a customer dines in, the restaurant provides seating, table service, and cleanup. With takeout, customers essentially provide this labor themselves – they transport the food, set their own table, and clean up afterward.

For restaurant owners, this has created a genuine productivity improvement. The same kitchen staff can produce food for both dine-in customers and the growing stream of takeout orders, increasing revenue without proportional increases in labor costs.

The Coming Capacity Crunch: When Kitchens Hit Their Limits

While the shift to takeout has driven impressive productivity gains, restaurant owners are increasingly discovering a new constraint: kitchen capacity. As takeout demand continues to grow, many restaurants are finding their kitchens simply can't keep up during peak periods.

Anyone who's watched "The Bear" also remembers those tension-filled scenes where the kitchen gets overwhelmed by a flood of order tickets – dupes spilling off the printer faster than the team can handle them. That fictional chaos perfectly illustrates what happens when a restaurant hits its capacity constraint. No matter how many orders come in, there's a physical limit to how much food a kitchen can produce in a given time.

Dining room capacty can be managed through waitlists, reservations and good front-of-house staff. Kitchen capacity, on the other hand, has harder physical limits determined by equipment, space, and workflow design - and online orders are less inclined to wait. These limitations create several challenges:

1. Bottlenecked production: During peak hours, the kitchen may become the constraining factor, unable to produce enough food fast enough regardless of how many orders come in.
2. Quality inconsistencies: When kitchens operate beyond their optimal capacity, food quality and consistency often suffer.
3. Delivery timing problems: Overloaded kitchens lead to delayed orders, harming the customer experience for both takeout and dine-in guests.
4. Staff burnout: Kitchen teams pushed to maximum output for extended periods experience higher stress and turnover.

The traditional response might be simply adding more kitchen staff, but this approach quickly hits diminishing returns. If your grill can only hold 12 burgers at once, adding a third cook doesn't increase output when two cooks can already keep the grill full. Similarly, limited prep space, refrigeration capacity, and cooking equipment create hard ceilings on production regardless of staffing levels.

Restaurant owners who don't recognize these physical constraints often make costly mistakes. They continue accepting orders beyond their true capacity, leading to delays, quality issues, and ultimately, damaged customer relationships. Or they invest in additional labor that can't actually increase output because of physical bottlenecks.

Applying Theory of Constraints: A Framework for Restaurant Growth

This brings us to a favorite framework of mine, created for addressing such limitations: the Theory of Constraints. First developed for manufacturing environments, this approach is exceptionally relevant for restaurants facing kitchen capacity challenges.

The Theory of Constraints follows a five-step process:

1. Identify the Constraint

For most restaurants experiencing the takeout boom, the constraint is typically a specific kitchen station or piece of equipment. It might be the fryer that can't keep up with combined dine-in and takeout orders, the expediting area that becomes cluttered with waiting orders, or simply the physical space where cooks bump into each other during peak periods.

Identifying the precise constraint requires careful observation. Restaurant owners should track which items most frequently cause delays or which station consistently has orders waiting. The constraint isn't always obvious – sometimes it's the prep area rather than the cooking line, or even the digital order system that doesn't efficiently communicate with the kitchen.

2. Exploit the Constraint

Once you've identified your kitchen's constraint, the next step is maximizing its efficiency without major changes. This might mean:

• Creating prep packages for constrained stations so cooks can work more efficiently
• Adjusting recipes or procedures to reduce time at the bottleneck
• Cross-training staff to ensure the constrained area is always optimally staffed
• Modifying menu items slightly to reduce dependency on constrained equipment

A pizza restaurant facing oven constraints, for example, might adjust recipes to reduce cooking time or reorganize the prep process to ensure the oven is never waiting for pizzas to be assembled.

3. Subordinate Everything to the Constraint

This critical step involves aligning all other operations around the constraint. If your fryer is the bottleneck, the entire order flow should be managed to keep it running at maximum efficiency without overwhelming it.

This might include:

• Throttling digital orders during peak periods to match kitchen capacity
• Spacing out large orders that would overwhelm the constrained resource
• Designing dining room seating and server sections to create a steady rather than spiked demand on the kitchen
• Scheduling prep work to ensure the constrained resource never waits for inputs

4. Elevate the Constraint

When steps 2 and 3 aren't sufficient, it's time to invest in expanding the constrained resource. For restaurants, this might mean:

• Adding additional equipment (a second fryer, larger grill, etc.)
• Implementing new technology (faster ovens, automated cooking equipment)
• Creating a separate prep line for digital orders
• Opening a ghost kitchen focused solely on takeout/delivery orders
• Redesigning the kitchen layout to improve flow and capacity

Walk into a Chipotle, and look past the staff thats making burrito bowls at the counter, and you'll see they've addressed their constraint by creating a second "make line" dedicated exclusively to digital orders. This allows them to maintain dine-in service quality while handling increased takeout volume. Of course, rebuilding your kitchen may be an extreme measure that brings its own trauma and challenges, as Carmy and his team at The Bear learned during their chaotic remodel.

5. Return to Step 1 When a New Constraint Emerges

Once you've addressed your primary constraint, a new one will emerge. The process is ongoing, with each improvement revealing the next area for focus.

Looking Forward: The Next Evolution

The restaurant industry's productivity revolution shows no signs of reversing. The shift toward takeout and delivery has fundamentally changed consumer expectations and restaurant operations. For restaurant owners, the challenge now is managing physical constraints while maintaining quality and profitability.

Those who apply the Theory of Constraints thoughtfully will be positioned to thrive in this new environment. By identifying their specific bottlenecks, maximizing efficiency around them, and making targeted investments to elevate capacity, they can continue growing without compromising the customer experience.

In an industry that saw virtually no productivity growth for decades, we're now witnessing a fundamental transformation. The restaurants that thrive won't necessarily be the largest or best-funded, but rather those that most skillfully manage their physical constraints while adapting to the changing dynamics of customer demand.