Walmart, 7-Eleven, and McDonald's shortened hours during the COVID-19 pandemic, and 24 hour shopping might be slow to return

·4 min read
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A McDonald's open 24 hours attracts late night crowds of intoxicated customers. Mario Anzuoni/Reuters
  • Walmart, McDonald's, and other chains shortened hours in response to COVID-19.

  • Some retailers are trying to return to 24/7 service, but they can't find workers.

  • One expert thinks overnight shopping will return eventually.

  • See more stories on Insider's business page.

The US is finally reopening after more than a year of COVID-19 restrictions, but some things may never be the same.

In the spring of 2020, as people locked down to slow the spead of the coronavirus, retailers adjusted schedules to make extra time for cleaning stores. Restaurants and shops with 24 hour operating schedules were most affected. Walmart adjusted hours so stores could close early for nightly cleanings, and 7-Eleven recommended owners close at midnight. Not all McDonald's were open 24 hours before the pandemic, but many closed dining rooms and shortened hours as safety precautions.

Restrictions are finally lifting as more of the population gets vaccinated, but conditions aren't what they were before, making it unlikely stores will return to 24/7 hours any time soon. Workers are hesitant to take on the risks of nighttime schedules, people have changed their shopping habits during and pandemic, and the labor shortage is making staffing stores and restaurants extremely difficult.

Nearly half of all US restaurants say they are "severely understaffed,"and even getting applicants in the door has been a struggle. Some chains are turning to large-scale hiring events to screen swaths of candidates at once, with perks like cash just for showing up and drive-thru interviews at some stores.

Read more: How the team that rescued KFC brought their marketing and innovation strategy to Pizza Hut and crushed Domino's in sales growth last quarter

7-Eleven, which has thousands of locations run by franchisees, told owner-operators to return to pre-pandemic hours in May.

The National Coalition of Associations of 7-Eleven Franchisees (NCASEF), which represents about 7,200 US locations, sent a letter to corporate leaders saying the shortage of workers and higher operating costs have led to a "very dire" situation.

Staying open for longer hours, as the company has instructed owners to do by May 24, isn't feasible, they said. Franchisees say finding staff for overnight shifts is "extremely challenging," and overnight sales do not necessarily cover the costs of labor.

Low traffic overnight hours can also bring risks of theft, violence, and intoxicated drivers, which may not be worth it to many operators or workers.

McDonald's, which just announced plans to raise wages at company-owned restaurants, is suffering from many of the same issues. Franchisees who can't find staff to cover hours largely blame enhanced unemployment benefits.

"Why work when you can get more staying home?" one McDonald's franchisee previously told Insider. "Stimulus and unemployment are killing the workforce." At least one location has resorted to offering $50 payments for interviewing, and another in Fayetteville, North Carolina, is reportedly offering a $500 signing bonus. Some locations, though, are back to 24 hour service.

For retailers with a franchise model, operators and corporate have different incentives, Mark Kalinowski of Kalinowski Equity Research told Insider. From an operator standpoint, franchisees like the 7-Eleven letter signees "might sell at night, but not profitably," Kalinowski said. Meanwhile, corporate is incentivized to push for more royalties that could come from longer hours.

Walmart has extended shopping hours from the original cut last March. US stores closed by 8:30 pm as of March 2020, and in November 2020 Walmart adjusted scheduled again so that stores would stay open until 11 pm, but there has been no indication of plans to further expand back to 24 hour operation. Walmart did not respond to Insider's request for comment.

While 24/7 shopping and dining is unlikely to return any time soon, experts aren't convinced its' gone forever. In the short term, a lack of workers will make it difficult for businesses to expand hours, Kalinowski told Insider, but "if there's consumer demand, operators will figure out how to make it happen."

While Kalinowski thinks extended hours will make a "substantial return," experts are unsure when to expect these changes.

Do you have a story to share about a retail or restaurant chain? Email this reporter at mmeisenzahl@businessinsider.com.

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