On the Margin

How will Winter Storm Jonas affect restaurants?

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This post is part of the On the Margin blog.

Anybody not living under a rock knows that a big giant blizzard of potentially historic proportions, which the National Weather Service has named Jonas, is bearing down on the Mid-Atlantic States.

The Washington D.C.-Baltimore area is under a blizzard warning through Sunday, with predictions of up to 30 inches of snow in some places. That’s a lot of white stuff.

New York City is under a blizzard warning through Monday with potential accumulation of as much as 12 inches.

Add wind gusts of 50 miles per hour to that mix and, well, nobody around there is going outside for a while.

I’ve been guilty of mocking executives’ sales excuses from time to time, but there are few better explanations for bad sales than ugly weather. A snowstorm like this will close restaurants and keep people at home. While a retailer can recover lost sales, a restaurant can’t recover lost meals.

Adding to this is the specter of difficult comparisons. January was always going to be a tough month for restaurants in part because sales were just so good a year ago. Same-store sales rose 5.3 percent in January last year, according to the MillerPulse survey.

That was the highest number in the post-recession era.

Not surprisingly, casual-dining chains have the most to lose. The storm is hitting just as the weekend begins, and casual-dining concepts depend heavily on weekends for sales.

In a note this week, Maxim Group Analyst Stephen Anderson said that Darden Restaurants Inc., and Texas Roadhouse Inc., are most at risk for losing sales in the event.

Dunkin’ Donuts has a lot of locations in the Northeast and Panera Bread and Chipotle Mexican Grill also have high exposure to the region, Anderson wrote. But “these chains can take some solace in the fact that they are more dependent on weekday traffic than on weekend traffic,” he wrote.

The good news? Temperatures are expected to be above freezing this week, which could minimize the impact for quick-service concepts.

Nevertheless, winter’s belated arrival could have a big impact on sales this month.

Contact Jonathan Maze at jonathan.maze@penton.com
Follow him on Twitter at @jonathanmaze

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Jonathan Maze

Jonathan Maze covers finance for Nations Restaurant News, as well as restaurant chains based in the Midwest. Jonathan came to NRN in 2014 after seven years covering restaurants for Franchise Times...
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