As restaurants strive to build loyalty and boost their bottom lines, some are finding success drawing in a late-night crowd with extended hours. Studies show that there has been 7.5 per cent growth in this daypart during Q2 year-over-year, and it’s becoming a viable source of increased revenues for many restaurants.
Pizza Hut has extended the hours in many of its locations, remaining open up to midnight and 2 a.m., offering the full menu for both dine-in and carry-out for late-night customers.
Taco Bell has also returned to their late-night hours, crediting this daypart with having a positive impact on their pandemic recovery. The success they’ve seen with late-night has influenced their approach to customer experience, and they’ve added newly designed walkup windows so customers can quickly pick up orders once the dining room has closed, while avoiding the drive-thru traffic.
Wendy’s has also extended its hours for the first time in four years, with 90 per cent of its locations now open until midnight. Todd Penegor, Wendy’s CEO explains that late-night is a rapidly growing opportunity for them, saying “The piece we really like is it continues to drive sales without adding labour, so it’s really margin accretive to the bottom line.” He also notes that delivery is important to late-night customers, adding “We saw a nice little uptick on delivery with the late night having those restaurants open a little bit later, there’s a preponderance of customers liking delivery at that late-night daypart.”
Why is this daypart growing and will it continue? With many companies continuing hybrid work models, employees are better able to set their own hours, meaning that they can stay out later at night and adjust their schedules accordingly. As well as the pandemic moves further back in the rear-view mirror, more evening activities are resuming, providing an opportunity for after-party snacking and meals.
However, the rise in late-night traffic may add labour issues to restaurant challenges, as the number of staff members willing to work into the night has decreased. So, while more revenue can be made by attracting customers who want to visit after hours, a lack of labour may inhibit many restaurants from being able to participate in drawing in that late-night customer.