Analyst: Blizzard likely to hurt restaurant sales in Northeast

As the Northeast braced itself Friday for what forecasters were calling the blizzard of the century, Wall Street analysts predicted February restaurant sales would likely take a major hit.

The storm was expected to dump up to two feet of snow in some areas over the weekend, and airlines suspended thousands of flights out of New York and Boston. Schools throughout the region were closed or dismissed early Friday and some cities announced plans to suspend mass transit on Friday evening.

Analyst Stephen Anderson with Miller Tabak + Co. LLC said in a report Friday that disruption caused by the storm would likely impact a number of public restaurant chains with a high concentration in the Northeast, including Dunkin’ Donuts, a chain with close to 60 percent of its units in the impacted area.

Jessica Gioglio, public relations and social media manager for Dunkin’ Brands Inc., said in a statement Friday that the company’s No. 1 concern is the safety of employees and franchisees, and their crew members and guests.

“Due to the forecasted impact of the storm in the Boston area our corporate headquarters is closed today. We have also been in contact with our field teams and franchisees in preparation for the threat of the storm, and we will be closely monitoring the situation today.”

Other chains that will also see an impact include The Cheesecake Factory, Panera Bread, Chipotle Mexican Grill and Darden Restaurants, Anderson said.

“Typically after Northeast storms, there is a short-term hit to sales within one to two days of the storm, but sales tend to be made up in the days following the storm because of pent-up demand,” Anderson wrote. “This was true during Hurricane Irene and the pre-Halloween snowstorm of 2011, but this trend did not hold after Hurricane Sandy in 2012 because of gasoline shortages that occurred in the wake of that storm.”

Anderson cautioned that the blizzard this weekend also had potential for widespread disruption that could possibly impact sales for the coming Valentine's Day holiday.

“Given the close proximity of the Valentine’s Day holiday next Thursday — which is an important sales driver for the industry, and particularly for The Cheesecake Factory and Darden — we will be watching closely the progress of opening roads and restoring power in the New York and Boston areas,” Anderson said.

While weekend sales are slower for Chipotle and Panera, Anderson said those chains could suffer more if infrastructure is not restored after the weekend.

“Despite our more constructive longer-term view on these two names, we caution they could see particular storm-related selling pressure in the next couple of days,” he wrote.

This article has been revised to reflect the following update:

Update: February 8, 2013 This article has been revised to include a statement from Dunkin' Brands Inc.

Contact Lisa Jennings at [email protected]
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