Hurricane Isaias impact on restaurant sales indicates what to expect this winter

Dive brief:

  • Hurricane Isaias, which hit the east coast in the first week of August, caused restaurant sales along the east coast to drop by 11%. Connecticut (-24%), New Jersey (-17%), New York (-17%), Massachusetts (-13%) and Rhode Island (-12%) were the hardest hit states, according to new data from Upserve.
  • The declines in sales were due to the loss of power in restaurants and the ability to accommodate an outdoor catering service. However, quick-service and casual restaurants were largely isolated, with a 17% increase in sales from the previous week. All other segments were down.
  • Restaurants made a comeback the week after Isaias’ death, however, posting their best post-COVID-19 selling day nationwide on August 8.

Dive overview:

Double-digit hurricane loss in sales could predict how winter weather will affect restaurants that increasingly rely on outdoor seating to bypass continuous dining room closures and capacity limits. Cold months could have an even more dramatic impact on restaurants.

Restaurateurs scramble to prepare for the coming season assuming dining room capacity still may not be at 100%. Chicago hosted a Winter Design Challenge, tasking participants with coming up with creative solutions for outdoor dining in winter, for example. Milwaukee restaurants have taken to sidewalks or streets for dining as part of the city’s Active Streets for Business program. For the winter, some of these restaurants plan to partially close some of these outdoor spaces and add heaters.

New York City has recommendations from the Department of Buildings on what type of radiators are acceptable, and curbside restoration operations must be approved by the fire department. However, as one operator told, “it’s not hard to winter a tent … but it’s not cheap”.

The fact that winter tends to be slower for restaurants further compounds this problem and many of them, especially in colder states, use their summer profits to help weather winter sales declines. That luxury probably doesn’t exist this year, as restaurants have struggled to stay afloat in the summer, let alone thrive. Adding in the costs of purchasing additional heaters, enclosures, and patio furniture makes things even more difficult. A restaurant in Washington, DC, for example, estimates it has spent around $ 30,000 over the past four years to be more usable in all types of weather.

Because of these additional costs on top of an existing crisis, some trade associations are asking for more help. Colorado Restaurant Association president and CEO Sonia Riggs said she hopes local governments will start using money from the coronavirus aid, relief and economic security law to help restaurants meet some of these additional winter costs. Meanwhile, the National Restaurant Association is pushing for a tax credit to provide some relief.

Some kind of solution is needed, especially as the dining room’s 100% capacity remains inaccessible in many places and predictions of a second wave of the new coronavirus abound. Many restaurants have remained afloat simply because they have been able to offer this temporary option of outdoor seating and if that option disappears, so does an important lifeline.

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