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Restaurant/bar business slows thanks to government shutdown

October 23, 2013Keith Gribbins

Craft Beer Tops Brands Sales
Where is everyone? Well, according to GuestMetrics’ early analysis, some of the particular weakness seen in on-premise during the past few weeks is likely due to uncertainty related to the government shutdown.

According to the new report from GuestMetrics, the company’s stream of restaurant and bar data indicates that across the board during the four-week period ending Oct. 6, trends for full service restaurants and bars continued to be very weak, resulting in 3Q 2013 being the weakest quarter so far this year for on-premise. According to the report, overall traffic to full service restaurants and bars started out the year at -1.4 percent in 1Q 2013, improved slightly to -0.8 percent in 2Q 2013, but then deteriorated to -1.7 percent for 3Q 2013, with traffic for the most recent four-week period even softer at -2.5 percent.

All three segments within on-premise have been generally very weak, so let’s crunch the numbers. Traffic to bars and clubs was -3.5 percent in 1Q 2013, improved slightly to -1.5 percent during 2Q 2013, but deteriorated fairly sharply to -4.2 percent for 3Q 2013, with traffic down a concerning -6 percent during the most recent four weeks. Traffic to fine dining started out the year at +2.4 percent, softened to +1.4 percent during 2Q 2013 and ended 3Q 2013 at +0.2 percent, with traffic even slower at -0.9 percent during the most recent four-week period. Casual dining traffic started out the year at -2.2 percent, improved to -1.4 percent during 2Q 2013, and was at -2 percent in 3Q 2013, with traffic at –2.5 percent during the most recent four weeks.

These trends are certainly discouraging, and likely a sign of the broad consumer base that continues to be very careful with their discretionary dollars particularly in light of the significant uncertainty coming out of Washington. Additionally, given the particularly weak trends during the last four weeks, which includes most of the first week of October, 4Q 2013 is likely already off to a soft start, unfortunately.

But what about booze? Well, on-premise alcohol volumes were -2.8 percent during 1Q 2013, recovered somewhat to -1.4 percent in 2Q 2013, but then decelerated to -3.8 percent in 3Q 2013, with alcohol volumes down 4.1 percent during the most recent four weeks. In terms of the specific alcohol categories, beer volumes were -4.3 percent in 1Q 2013, improved to -2 percent in 2Q13, but then deteriorated relatively sharply to -4.8 percent in 3Q 2013, with volumes at -5.2 percent during the most recent four weeks, likely hurt by the particularly weak traffic trends to bars and clubs. Spirits volumes were -2.4 percent in 1Q 2013, saw a slight improvement to -1.4 percent in 2Q 2013, and weakened to -3.1 percent in 3Q 2013, with volumes at -3.5 percent during the most recent four-week period. And lastly, wine volumes started off the year on a positive note at +0.8 percent in 1Q 2013, improved very slightly to +1 percent during 2Q 2013, and have now dipped into negative y/y territory at -1.1 percent, with volumes at -2.0 percent in the most recent 4 weeks.

GuestMetrics’ early analysis of these trends by region suggests that some of the particular weakness seen in on-premise during the past few weeks is likely due to the uncertainty relating to the government shutdown, so the company’s hope is that with the recent resolution, some of the traffic and volume trends in on-premise will finally start to turn a corner in the coming weeks.

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Reader Interactions

Comments

  1. beerofsc says

    October 25, 2013 at 8:04 am

    Restaurant and bar business seems to be slowing, says @CraftBrewingBiz. http://t.co/sWNXUcc6Ni #CraftBeer

    Log in to Reply
  2. George Horning says

    October 23, 2013 at 11:45 am

    George Horning liked this on Facebook.

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