Here at Enigma, we have trust issues. Not the relationship kind (okay, maybe a little), but the data kind. We don't trust that a business listing from 2019 is still accurate. We don't trust that two "different" companies aren't actually the same pizza shop with questionable record-keeping. We certainly don't trust that every registered business entity is actually, doing business. So we've built a quality control system that would make a pharmaceutical lab jealous—492 checks, weekly pipeline runs, and enough validation protocols to fill a small library. The result is data so clean you could perform surgery on it.
Which brings us to this month's investigation, where we used this obsessively verified data to tackle an economic puzzle that's been stumping researchers: why did restaurant productivity surge 15% during the pandemic and stubbornly stay there, even as the rest of the economy returned to normal? We dug into the numbers to find out what's really driving this unprecedented shift in how America's restaurant industry operates. The answer might surprise you. Or it might not. But the scale of it definitely will.
Want to understand exactly how we ensure unparalleled data quality? Our technical whitepaper breaks down the methodology we use for data quality used investigations like this one.
Something unique is happening in the restaurant industry. Across large swathes of the U.S. economy, labor productivity initially surged during the pandemic. But it's since cooled off and is basically back to the pre-pandemic trend. But not so in the restaurant industry: productivity jumped after an early pandemic shock and has remained a whopping 15% higher than pre-COVID levels since. The Chicago Fed's Austan Goolsbee and his fellow researchers picked apart this puzzle using cell-phone location data and found the answer: takeout and delivery orders. But what's the input driving that change? Just how much have takeout and delivery orders increased?
Enigma data gives us the answer, which is a lot:
Takeout and delivery orders have more than doubled since 2017, when measured as the percentage of restaurant revenues that came from online orders. That would be a big shift for any industry, but for one with notoriously high fixed costs and low margins, it’s reoriented how restaurants work – or more precisely, how much work they can do when a bigger and bigger chunk of their business isn’t tied to the number tables they can fill and staff can service. The pandemic forced a structural shift in how restaurants operate. Two years later, that shift has become the new normal—and the productivity gains prove it's here to stay. It's the kind of economic transformation you can only truly see with comprehensive economic data. You know... the kind we obsess over.
From gig economy workers to digital marketing influencers to your local bodega, verifying a growing range of small businesses is essential to modern KYB. That’s where Enigma’s new Social Security Number (SSN) Verification product comes in. While many businesses use Employer Identification Numbers (EINs) to identify themselves, SSNs are also perfectly valid and used by countless businesses to pay workers and get paid for their hard work. We have you covered no matter who comes knocking—Enigma’s new SSN Verification Product pairs with our existing EIN Verification to provide comprehensive identity verification for small businesses in your ecosystem.