The pandemic isn’t slowing down In-N-Out, which just keeps on expanding

in-n-out opening with restaurant sign on beautiful day
Photo via Mike Mozart/Flickr (CC BY 2.0)

The coronavirus has hit the restaurant industry particularly hard, as 100,000 (or, nearly one in six) restaurants in the U.S. have temporarily or permanently closed within the first six months of the pandemic. As a result, nearly 3 million restaurant employees are out of work across the country. Yet, In-N-Out, the popular Southern California fast-food chain, is thriving and opening new restaurants during these tough times.

Not only has In-N-Out had eight new locations opening in 2020—including two in Colorado, the first for the state, with a third opening by the end of the year—but it has also hired new employees across all 363 locations. These include 130 new jobs at the Colorado location, which start at $14.50 an hour. Even in the early days of the pandemic, the chain hadn’t resorted to furloughing or laying off a single employee.

As for why In-N-Out is opening new stores and expanding its footprint while others in the industry continue to struggle, it’s a complex question. But a big part of it is what makes In-N-Out beloved among its fans—an unwavering commitment to quality.

When the pandemic caused food supply chain disruptions and the price of ground beef went up more than 25%, In-N-Out simply absorbed the cost instead of turning to frozen beef or halting burger sales altogether. “Those things didn’t even enter my mind,” 38-year-old owner and president Lynsi Snyder told Forbes. “Quality is way too important and embedded in who we are. We are not going to compromise now.”

Snyder, whose grandparents opened the first In-N-Out location in Baldwin Park, California, in 1948, became the sole heir when her grandmother died in 2006. Since she took over as president in 2010, Snyder has nearly doubled sales and expanded to more than 100 locations. She’s also responsible for the company’s expansion beyond California, into markets such as Oregon, Texas, and Colorado.

Because In-N-Out is privately owned by Snyder, who is worth an estimated $3 billion, she personally oversees quality control of the restaurants. That’s also part of the reason for the relatively slow expansion, compared to other chains.

Unlike most restaurants, which work to grow into distributors as they expand into locations, In-N-Out will only open new locations once it has an infrastructure in place. Because the chain uses only fresh beef and employs its own butchers, locations rely on these daily deliveries from its distribution centers.

With the new distribution center in Colorado in place, the company is now poised to tackle markets such as Idaho and New Mexico, both of which are within a day’s drive. That probably means even more In-N-Out locations opening.

“We really have been working on spacing out our openings through the year and getting a lot of stores in the pipeline so we can just be ready,” Snyder said. “We try to keep it at a nice, steady pace. We’re not going all-out building stores everywhere.”

Another part of In-N-Out’s big picture is how it treats its employees—right down to those flipping burgers or working cash registers. In addition to competitive hourly wages, paid vacations, and benefits, In-N-Out has taken care of its associates during the pandemic.

The company replenished sick-time banks and guaranteed paychecks even when working hours were not available. Recognition bonuses were also given to working associates across all facilities.

And all of the hard work and goodwill has paid off. Damon Chandik, the head of restaurant investment banking at Piper Sandler, told Forbes that In-N-Out is well-positioned to come out of the pandemic even stronger.

“In-N-Out is definitely a business that’s in a class by itself,” said Chandik. “They’re able to absorb shocks better than some other businesses in the restaurant industry, which is really hurting right now. There will be less competition for employees and more customers per restaurant chain because there will be fewer chains out there.”

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Source: Forbes, National Restaurant Association

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