Covid changed many ways of life, and in looking at spending patterns in New York City, we have seen a significant shift in where and when people are eating and going out - from lunch to dinner to late night.
The changing spending patterns in New York City offer valuable insights into the evolving nature of work and its impact on the local economy. Looking at aggregated and anonymized Mastercard insights, we explore daily spending at restaurants and bars by hour of day.
Overall, spending at restaurants and bars across New York City’s five boroughs is up +13% in the 12 months through March 2023 relative to the 12 months before the pandemic (through February 2020). Spending growth, however, has varied substantially across neighborhoods, days of the week and time of day. The Bronx (+33%) has seen the strongest recovery, closely followed by Brooklyn (+30%) and Queens (+30%). Manhattan has lagged, with growth of just +3.7%. 1 The recent trend, however, in Manhattan is encouraging, with momentum building as commuters and tourists return to the core of the Big Apple. Looking at Q1 2023, year-over-year growth in Manhattan (+36%) is outpacing the rest of the city by a wide margin. 2
Zooming in on Manhattan and looking at the same measurement of growth relative to pre-pandemic, the story of the dining sector varies by the time of day. The gains reflect a popular nightlife scene, with +6.3% growth in late-night spending. Lunch, in contrast, is still running down about -5%, but the trajectory is positive for lunchtime spending. 1 Again, this is a nuanced story with differences by the day of the week: Tuesdays through Thursdays have seen greater lunchtime activity in the business districts, reflecting the return of commuters during those days.
Examining restaurant spending can help us not only understand how people have shifted their behavior post-pandemic, but empower restaurants to make data-driven decisions to acquire high-value consumers and engage existing ones.
Lunchtime spending during the workweek looks much different now than three years ago. With more people working remotely than before the pandemic, spending at restaurants during the lunch hours of 11 a.m.-4 p.m. has shifted from commercial to residential areas during the workweek.
In Manhattan, lunchtime spending was down -5% vs. pre-pandemic levels, 1 although this has slowly been improving with each passing month. By comparison, growth has been positive since May 2021 in the outer boroughs.
In looking at spending by day of the week, Manhattan lunchtime spending was down only -6% on Wednesdays, compared to down -15% on Fridays. But it differs greatly by the type of neighborhood. Focusing first on the major office districts (where office space occupies over 50% of buildings in the zip code), Friday lunchtime spending was down over -26%, Monday was down -22%, and Wednesday was down –12%, while weekend spending was up +6%. 1
We see a differentiation by neighborhood even within the office districts. In Midtown’s high-rise office district encompassing Grand Central Terminal, lunchtime accounted for 37% of daily restaurant spending in Q1 of 2023, budging only slightly from 38% in 2019. Financial firms that dominate this area have been the most eager to bring employees back to the office. In contrast, the Financial District (lower Manhattan) has seen the lunchtime share of daily restaurant spend dropping by -10 percentage points. 3 This likely reflects the transition of the Financial District – it has become more residential over the last three decades and the pandemic accelerated this shift. The restaurant scene would typically quiet down after lunch hours, and now it has a burgeoning evening scene catering to an entirely different crowd.
The opposite is happening in Brooklyn and Queens, where many residents who have historically commuted to Manhattan every day have been on hybrid schedules, resulting in bigger lunch crowds on Mondays and Fridays. The return to office is much more visible Tuesdays through Thursdays, while those on hybrid schedules will likely work remotely on Mondays and Fridays. For example: in Greenpoint, lunchtime spending growth on Fridays is up +60%, growing about twice as fast as Thursday, which is up +30%. 1
The strongest neighborhoods overall have been those where a construction boom has resulted in strong population growth and gentrification. For example, take Greenpoint again, where 20% of residential units were built after 2016 and population has soared. 4 It saw a +52% increase in lunchtime spending, with overall restaurant spending up just shy of +50%. 1 Long Island City-Astoria, Queens, another area with rapid residential development, has seen growth nearly as strong.
The pandemic changed many things but not New York’s vibrant nightlife. Late-night (11 p.m.-5 a.m.) spending at restaurants and bars exceeded pre-pandemic levels by February 2022. Nighttime spending in NYC is now 11% above pre-pandemic levels. 1 But the story of course, differs by neighborhood. In the Lower East Side, a third of spending at restaurants and bars happens during these nighttime hours. This compares to only 10% on the Upper West Side – a neighborhood known for less foot traffic and likely earlier bedtimes.
Neighborhoods that were late-night hot spots before the pandemic were among the leaders in the overall restaurant recovery. Other areas have seemingly ramped up their evening activities. For example, in the Financial District zip code encompassing Wall Street, peak weekly dining revenues now come on Saturdays from 10 p.m.-11 p.m. This is a remarkable change for an area where many restaurants used to close on weekends. Indeed, nighttime spending in the area stands +135% above pre-pandemic levels, making up 15% of daily restaurant spending in the neighborhood so far in 2023. Across the East River, the evening scene is also going strong in Brooklyn and Queens, where dinner and nightlife spend have grown +29% overall. Brooklyn's Bedford-Stuyvesant, Bushwick, and Greenpoint neighborhoods were even stronger, running close to 50%, on average. 1
The shift in spending patterns in New York City highlights the changing nature of work and how the local economy has morphed since the pandemic hit over three years ago. The enduring appeal of the city's vibrant dining scene and lively nightlife have been critical in the post-pandemic recovery. In Manhattan, restaurants are relying far more on weekends and mid-week evening dining.
On the other hand, the outer boroughs have picked up share across the week, with Brooklyn and Queens seeing the most significant shift from 2019 through today. In office districts, such as Midtown and the Financial District, lunchtime spending has declined while nighttime spending has risen, as new establishments cater more to bigger-ticket destination dinners rather than the generic desk salad.
Overall, businesses will need to adapt to these changing spending patterns to remain competitive, while local governments need to be aware of the implications of these shifts for urban planning and development.
Understanding where and when people are spending is critical for restaurants, bars and shops in making smart business decisions. It can inform decisions on where to open new restaurants, which hours to stay open, and how to build the menu and run promotions based on neighborhood demand. We have already witnessed a transformation of businesses since the pandemic. According to the U.S. Census Bureau, applications for new businesses in New York City surged about +25% since the pandemic. There has undoubtedly been a great deal of change as companies respond to adjustments in consumer behavior. And it isn’t over yet.
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Footnotes
1 Mastercard Economics Institute analysis of aggregated & anonymized switched volumes across New York City’s five boroughs in the 12 months through March 2023 relative to the 12 months before the pandemic (through February 2020). Nominal US dollars unadjusted for FX.
2 Mastercard Economics Institute analysis of aggregated & anonymized switched volumes across New York City’s five boroughs in Q1 2023 vs. Q1 2022. Nominal US dollars unadjusted for FX.
3 Mastercard Economics Institute analysis of aggregated & anonymized switched of lunchtime share of daily spend. Nominal US dollars unadjusted for FX.
4 Mastercard Economics Institute analysis of NY Department of City Planning data, via NYC Open Data.
About the Mastercard Economics Institute
Mastercard Economics Institute launched in 2020 to analyze macroeconomic trends through the lens of the consumer. A team of economists, analysts and data scientists draws on Mastercard insights - including Mastercard SpendingPulse™ - and third-party data to deliver regular reporting on economic issues for key customers, partners and policymakers.
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