Marketing

Lunch customers spending surpasses pre-pandemic levels

Provided by Toast

May 31, 2023

Lunch is back in a big way, according to Toast's Restaurant Trends Report, which includes Q1 2023 data from selected cohorts of restaurants on its platform used by 85,000 restaurant locations.

Data revealed that the amount guests have spent on food — whether dine-in or takeout — increased 46% on average since 2019. The average spend on takeout food during lunchtime in Q1 2023 was $22 per order, a 42% increase from the same period in 2019. Also, the average amount spent on dine-in food was $24 per order in Q1 2023, showing a 49% increase from Q1 2019.

Not all areas are created equally, however.

Toast compared the average number of same-store weekday transactions between 11 a.m. and 3 p.m. local time per restaurant location in Q1 2019 and compared it to Q1 2023 to analyze how busy restaurants are at lunchtime. The Kansas City and Charleston areas were the only metropolitan statistical areas that increased weekday lunchtime transactions in Q1 2023 compared to Q1 2019. Larger commuter areas like New York City, Philadelphia, Chicago and San Francisco still haven't fully returned to their pre-pandemic level of weekday lunchtime transactions.

Dine-in, however, reigns supreme for workday lunches in most areas. Three years since the effects of the COVID-19 pandemic reached the U.S., dine-in still dominates workday lunches and accounts for 70% of lunchtime transactions in Q1 2023 compared to 79% in Q1 2019. For the same period, takeout transactions rose from 20% to 27%. Lunchtime delivery is also up, accounting for 3% of lunchtime transactions in Q1 2023 compared to just 1% in Q1 2019.

Lunch and alcohol?
Toast's analysis of weekday transactions revealed that Wisconsin had the highest percentage of alcohol purchases during lunchtime compared to any other state. On average, alcoholic beverages in Q1 2023 made up nearly 30% of items on the average Wisconsin lunch bill, which is almost twice the national average of 16%. New York, on the other hand, was tied at the bottom of the list for states where alcohol is ordered alongside lunchtime meals only 8% of the time.

Tipping fatigue
Further data analysis indicated guests were leaving lower tips when dining in at QSRs than in previous years. The average on-premise tip for QSRs has declined to 16.7% in Q1 2023, the lowest in five years. Tips for delivery and takeout at QSRs dropped to 13.9% in Q1 2023, a similar rate to before the pandemic.

Across the country, tips can vary based on several factors, such as minimum wages for tipped employees, cost of living, taxes and the type of service. California and Washington State, for example, have some of the lowest tippers, but one of the highest minimum wage laws for tipped employees, according to the Department of Labor.

Looking at Florida, for example, the Miami metro area had an average tipping rate of 16.4% in Q1 2023, which is 2% lower than the average tipping rate for Florida as a whole. Restaurants in international tourist cities, such as Miami, may be more inclined to include a service charge or gratuity on the bill, which could account for its relatively low tipping rate, as people will likely tip less if there is an automatic additional charge on the check, according to Toast. In Florida, restaurants that automatically charge a gratuity are currently required to "include on the food menu and on the face of the bill provided to the customer notice that an automatic gratuity is included."

Delaware, however, had the highest average tip percentage at 22%, more than a full percentage point ahead of Indiana.