NEW YORK As the Big Three auto company chiefs left Washington to retool their case for a federal bailout, two restaurant analysts said Friday that Bob Evans Farms, Buffalo Wild Wings and Texas Roadhouse could be the most vulnerable to a downsizing, or failure, of the U.S. auto industry.
Just like California and Florida were the centers of the nation’s subprime-driven housing crisis, Michigan, Ohio and Kentucky are set to be the ground zero of a possible auto industry fallout, according to analysts Brian Moore and Mark Yee at Wedbush Morgan Securities. The duo based their assessment on state-by-state total domestic auto production. The restaurant chains with larger amounts of Midwest units will feel the brunt of a sales slowdown if additional auto manufacturing jobs are lost, they said.
At Bob Evans, 47 percent of the namesake family-dining chain is in Michigan, Ohio and Kentucky, the Wedbush research showed. Twenty-five percent of the Buffalo Wild Wings system rests in those three states, and 13 percent of the Texas Roadhouse chain is located there. The other chains within Wedbush’s research coverage each have less than 10 percent of their locations in those states.
Bob Evans and Texas Roadhouse posted negative same-store sales for the most recent third quarter, but Buffalo Wild Wings continued to run against industry traffic with a 6.8-percent increase in same-stores sales.
The Big Three auto companies — Ford Motor Co., General Motors Corp. and Chrysler LLC — along with their parts suppliers employ about 973,000 people. Unemployment in Michigan, Ohio and Kentucky already is above the 6.5 percent national average, with Michigan posting 8.7 percent, Ohio at 7.2 percent and Kentucky at 7.1 percent.
