How Winter Weather is Impacting Restaurants

We All have to eat … and this year we have had a bad case of winter blues.

Wall Street analysts predict that rising heating bills will take a cut of already limited consumer discretionary spending, serving as a “crowding out” factor that will likely last through late spring.

Charles Grom, analyst with Sterne Agee, estimated in a report released Wednesday that natural gas bills — the primary source of heat for about half of U.S. households — will rise about 73 percent this winter, translating to about a 6-percent drag on consumer spending, with particular ramifications in the Midwest and Northeast.

The average heating bill in 2012 was about $768 for natural gas, but Grom projects this year’s spending will be closer to $1,326, and will impact spending into the spring, given the delay as consumers receive their heating bills.

“We’re incrementally concerned that retail sales could stay under duress, particularly given the ‘sticker shock’ impact from these higher bills,” he wrote.

It has been a bad winter, the second coldest since 1970, writes Grom, with the most snow in three years. Wisconsin, Minnesota and Iowa have experienced double-digit declines compared with last year, and Midwestern and Northeastern states have all suffered colder winter months compared to the previous year. Ironically, the warmest state was Alaska, Grom noted.

Grom pointed to Sonic as one brand that might be hit particularly hard by the weather, in part because of its drive-thru model, but also because almost 79 percent of the chain’s store base is in states hit by the cold.

Other analysts pointed to companies like Potbelly Corp., Bravo Brio Restaurant Group Inc., Panera Bread Co., Chipotle Mexican Grill Inc., Noodles & Company, and Del Frisco’s Restaurant Group Inc. as being vulnerable, based on locations in weather-impacted states.

The weather was largely to blame for negative Knapp-Track results in January, according to other analyst reports. The same-store sales index for casual dining fell 2.6 percent in January, a sequential improvement over the 6.1-percent decline the index showed in December. Casual-dining traffic fell 4.4 percent for the month, which was the same decline Knapp-Track reported in December.

Stephen Anderson, senior analyst for Miller Tabak + Co. LLC, predicted comparisons will be easier for restaurant companies in February and March. Fundamentally, Anderson sees an improving macroeconomic backdrop that will benefit restaurant companies despite the temporary weather volatility.

“We argue continued improvement on payrolls and thus on discretionary income remain more powerful longer-term indicators on the health of the restaurant sector,” he wrote.

Barring unforeseen shocks, like a spike in fuel prices, he said, “we expect a sustained rebound in the same-restaurant sales in the next couple of quarters to the positive 1 percent to 2 percent range.”

Back

What Clients Say About Patrice & Associates

  • Hospitality Recruiter Can Help You Find a Job!

    Karl was the best asset in securing my new position. He was there coaching and teaching me every step of the way. I have been working in the food industry for 20+ years and this is the first time I have used a recruiter. I have been on both ends of the hiring process and Karl has helped to know what people are looking for and what I should be looking for when hiring new employees. I look forward to meeting Karl and shaking his hand. If needed I would seek Karl out again!         Mahmoud Elkhyati         Need help with your resume – Have a Recruitment Specialist help you for FREE       Hospitality Recruiter Can Help You Find a Job!
  • Hospitality Recruitment Works!

    My interactions with Mr. Richard were professional. He was very accommodating to my wants in needs when it came to the company I was looking to become a part of. I had tried myself to obtain a position with this company, but I was not able to do so on my own. With Richard's help I was able to land the position.  He kept me in the loop when it came to every interview that I had from beginning to end and kept me very upbeat and positive about the experience. I believe this is how a head hunter or recruiter should perform when dealing with clients very professional and had integrity in everything that he did.     Albert Jones     Hospitality Recruitment matches YOUR skills with the perfect job Hospitality Recruitment Works!
  • Hospitality Recruiters Are Here to Help

    Daniel was a great help to me on my job search. From the first time I was contacted by him I felt he was here not only to help the company find the right candidate but he was there to make sure I was right for the position.  Daniel is very persistent when he is working with you.  He knows that time is of the essence and he helps you adhere to a very strict timeline to be successful.  Daniel is there for you when you are feeling unsure and is always available to discuss just about anything.  He has a wealth of FOH & BOH knowledge and that really put me at ease because I have not met many recruiters with FOH & BOH experience. Talking to someone who has been where you have been really puts you at ease!  I am very appreciative that I had the chance to work with Daniel on this occasion.  I am thankful he was understanding, attentive, communicative, and seems to generally care about you as a person and a perspective candidate! Katherine Woods         Career Coaches that help you for FREE Hospitality Recruiters Are Here to Help
  • Hospitality Recruiters Make the Best Match for You in Your Next Job!

    Tom Schmitt was nothing but more than professional and courteous to me.  He originally contacted me about a company looking for a General Manager.  I was employed at the time, but not very happy in my situation.  Tom talked to me in great detail in regards to the position he had.  After careful consideration, I decided to pursue the opportunity.  He helped me create a more professional resume to present to the company.  He communicated to me on a daily basis as I went through the interview process.  I was eventually given an offer for the General Manager position.  I can honestly say that without Tom's help, I would still be in an unhappy job.   Thank you,   Roy Riddle     What kinds of jobs does a Hospitality Recruitment Specialist have for me? Hospitality Recruiters Make the Best Match for You in Your Next Job!
  • Hospitality Recruiters can help YOU find a job!

    Stephanie Yee played a key role in not only getting me in the door for my first interview, but in every step thereafter in the process. Stephanie coached me on effective interview strategies specific to my prospective role and made herself available for questions anytime. I was consistently kept in the loop with each new step in the process and her client insights proved invaluable. I always knew what to expect at each turn and who I would be interviewing with, along with basics like where to park and expected attire…all things that can easily trip up a less informed candidate.  In addition to all of this, Stephanie’s naturally positive attitude helped me to stay calm throughout a lengthy interview process that spanned a number of anxiety driven weeks. In short, without Stephanie in my corner, I wouldn’t have been able to turn this new chapter in my career. Sincerely, Steve Davis Hospitality Recruitment matches YOUR skills with the perfect job Hospitality Recruiters can help YOU find a job!