Recently, being stuck in long and slow lines at the drive thrus of McDonald’s, In-N-Out Burger, Starbucks and other restaurants seems be the norm.
What’s going on? It seems like consistently long-lines are a sign of high demand and business success. So, why aren’t these businesses building more capacity to serve the high demand? Why aren’t other businesses looking at these successful business models more closely to copy them?
Some possible explanations
- I’m just happening to consistently see these businesses at their peak times and there really isn’t enough demand to justify increasing capacity — be it a heavy investment in opening new locations nearby or a more modest investment like expanding kitchens to pump out more orders per unit of time.
- There is high demand, but the companies are cautious to make investments to expand, thinking it may just be a short-term trend. Mark Perry’s Carpe Diem blog, posted a chart showing restaurant sales outstrip grocery store sales for the 17th straight month based on recent Census Bureau data, but prior to that, grocery sales were greater than restaurant sales.
- Other things are slowing the lines down. I think a contributor to long lines at Chipotle and Starbucks has been the added ability to order through their phone apps, which adds a third queue to the same production line that was previously just serving two queues (counter and drive thru).
- I’ve seen some internet posts speculating that companies are cracking down on schedules to manage labor expenses especially in regards to keeping their workers under the Obamacare thresholds for providing health insurance benefits and potential $15/hour minimum wage mandates. These may also increase the caution these companies have in expanding capacity in their low-skill labor intensive business models.
Could it be that distortions caused by health insurance and minimum wage mandates are the contributing to turning fast food slow?
Maybe it’s a bit of a mix of all these things: People eating out more, businesses reluctant to invest in expansion and also dealing with changes in health insurance and wage law, along with some fits and starts incorporating apps into their businesses.
Whatever is causing it, it’s annoying.