Square Reveals Trends in Restaurant Payroll, Happy Hours, and Drink Preferences


Square’s latest Quarterly Restaurant Report sheds light on evolving dining trends, consumer spending, and restaurant wages. With patio season approaching, these insights offer valuable information for restaurant owners.

Rising Payroll Costs in Full-Service Restaurants and Bars

Labor remains a significant expense for restaurants. According to the Square Payroll Index, hourly earnings for restaurant workers have increased by 66% since 2017, compared to a 40% rise for retail workers. Payroll costs have grown more rapidly in full-service restaurants and bars than in cafes and quick-service restaurants (QSRs).

Ming-Tai Huh, Head of Restaurants at Square, stated:

“Bars and full-service restaurants rely more on higher-skilled employees who perform hard-to-automate tasks, which increases payroll costs. It’s the exact opposite situation for QSRs and cafes. These sellers can more easily use technology to automate and streamline operations, helping lower operating costs for front and back of house.”

Chicago recently approved an ordinance to phase out the tip credit, raising the minimum wage for tipped workers from approximately $9 to $15.80 per hour by 2028. As of April 2024, 62% of Chicago restaurant workers already earn a base wage of $15.80 per hour. The median wage for these workers, including tips and overtime, is $21.70 per hour.

Ara Kharazian, Square Research Lead, commented:

“Twenty-two states have already raised their minimum wage this year, with several more scheduled in the coming months. In addition, a number of state and local governments are working on similar bills to phase out tip credit. In an industry where profit margins are already tight, restaurants can increase staff efficiency with technology. This helps free up their time to focus on the customer-facing aspects of the business versus manual, tedious tasks.”

Despite the rise of remote work, weekday happy hours remain popular. Square data indicates that traffic in bars and restaurants between 4-6 p.m. has surpassed pre-pandemic levels. Conversely, weekday lunch traffic has not yet recovered.

As the weather warms up, consumers flock to outdoor venues, boosting sales of summer cocktails. Square’s data shows vodka as the overall favorite spirit, though tequila is preferred in certain cities. San Antonio, Los Angeles, Miami, Houston, and New York City show a strong preference for tequila.

Square also noted a seasonal increase in restaurant spending starting at the end of March, peaking during the summer, and dipping before the holiday season.

Image: Depositphotos

Michael Guta Michael Guta is the Assistant Editor at Small Business Trends and has been with the team for 9 years. He currently manages its East African editorial team. Michael brings with him many years of content experience in the digital ecosystem covering a wide range of industries. He holds a B.S. in Information Communication Technology, with an emphasis in Technology Management.