Is the Corporate Retail Lunch Rush Gone?

In corporate America, where 9-to-5 schedules are tight and most blue-collar workers share the same schedule, the lunch hour manifested into American corporate culture. It served as a time for socializing, closing deals, fostering teamwork, and simply unwinding. But today, it is quickly disappearing from the collective consciousness.

In a shift driven by the rise of hybrid work, the traditional weekday lunch rush in American bars and restaurants has yet to bounce back to pre-pandemic levels. Instead, consumers are saving their money for weekend spending. Data from Square, a digital payments platform, indicates a notable change in spending patterns, with lunchtime transactions between 11 a.m. and 2 p.m. on weekdays dropping by 3.3% last year compared to 2019. Conversely, weekend card transactions increased by 4.2%, and weekday happy hours saw a modest rise of 0.3%.

One of the most significant transformations over the past few years is the shift in consumer habits among office workers. This demographic is now more inclined to spend their money during weekends, with brunch emerging as a particularly popular option. In 2023, 1.88% of food and drink transactions processed by Square occurred between 11 a.m. and noon on Saturdays, up from 1.6% in 2019. This data, which reflects transaction volumes rather than dollar amounts, indicates increased foot traffic rather than inflation-sensitive spending.

Boston exemplifies this shift. Square’s analysis of 23 major cities revealed that weekday lunch transactions in Boston fell by 10.1%, while weekend and happy hour transactions rose by 10.3% and 1.6%, respectively. Aceituna Grill, a fast-casual Mediterranean restaurant in Boston, has witnessed a noticeable decline in lunchtime crowds at the three locations it opened before the pandemic, particularly those near Bank of America and PwC offices, per the restaurant’s CEO AJ Kurban.

“We used to have a line out the door every single day. Now we’re lucky to get a line out the door two to three days a week,” Kurban stated. He also added that sales at those three locations were at least 20% lower in 2023 than they were in 2019.

In response, Aceituna has adapted by opening a new restaurant in the tourist-heavy Back Bay shopping district and extending Sunday hours at its Seaport location. So far at the new Back Bay restaurant, Kurban said that “weekends and nights are a lot busier there than any of our other locations.”

This trend is reinforced by research from the University of Toronto, which shows that foot traffic in major U.S. cities’ downtown areas has rebounded more quickly during evenings and weekends than on workdays. Despite the increased costs of dining out, Americans’ leisure spending has remained resilient post-pandemic.

As consumer habits continue to evolve, restaurants and bars are adjusting their strategies to attract weekend and evening crowds. Fast-casual brands like Sweetgreen and Chipotle have fared better than many other establishments, drawing in diners who are willing to spend more on eating out. In contrast, fast-food chains are struggling to retain budget-conscious customers.

According to a survey by catering company ezCater, Gen Z workers, who began their careers during the remote work era, are less likely to take lunch breaks, and when they do, their breaks are typically a half hour or less. This generation, having started their professional lives in home-based offices, missed out on the communal lunchtime experience and the chance to discover favorite local eateries.

The survey noted that 70% of Gen Z respondents said they skip lunch once a week, in comparison to 53% of millennials, 43% of Gen Xers, and 30% of baby boomers. Additionally, Gen Zers are “twice as likely to worry that their bosses will judge them for taking a lunch break.”

Young consumers, eager for social interaction, are a “prime target” for bars and restaurants aiming to boost evening and weekend patronage, according to Soojin Lee, a professor at Cornell University’s Nolan School of Hotel Administration. Many establishments are offering deals and promotions to entice these demographics, hoping to counteract the decline in weekday lunch business.

Millennials, known for spending the most on lunch to save time, according to ezCater’s survey, could influence their younger colleagues. As Gen Z workers interact more with their millennial counterparts in the office, they might adopt similar spending habits, valuing the convenience and social aspects of dining out.

The number of restaurants in the U.S. remains below 2019 levels, and growth is anticipated to be slow. Urban eateries, in particular, have struggled with the loss of weekday traffic as remote work became the norm. In contrast, suburban restaurants experienced a surge in business from locals working from home, prompting some restaurants and renowned chefs to follow their clientele out of the cities.

For downtown restaurants that survived the pandemic, the long-awaited return of office workers has brought mixed results. Even as mandates to return to the office increase, the traditional lunch rush has not fully rebounded. Several factors contribute to this shift. Many offices now operate on a hybrid model, with employees coming in only part time, reducing the frequency and volume of lunchtime patrons.

Economic pressures also play a role. With rising restaurant prices and broader financial concerns, workers may be less inclined to spend money on lunch out. Lower-income individuals, who are more likely to skip dining out, could change their habits as they advance in their careers and gain more disposable income. Moreover, menu price increases have been slowing down over the past 10 months, hinting that budgetary concerns might start to ease across generations.

In this evolving landscape, the restaurant industry must adapt to new patterns and preferences. While the traditional lunch hour may never fully return to its former glory, there is potential for a revitalized approach that accommodates changing work habits and generational shifts. The resilience of restaurants and their ability to innovate will be key to navigating these challenges and seizing new opportunities.