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Government Shutdown Negatively Affects D.C. Restaurants

Posted by Avero Team | October 14, 2013

Government Shutdown Negatively Affects D.C. Restaurants

With the current government shutdown, Avero was interested in understanding how it may be affecting the Washington D.C. area restaurant business. Given our ability to readily access over $14 billion in food and beverage data, we used our powerful software tools to dive into understanding how D.C. restaurants have been affected and came up with some fascinating findings.

Our year-over-year same-store sales analysis reveals that traffic slowed down by 7.6% in the first week in October, marking a 4.6% decrease in year-over-year growth of covers. With a 4.6% loss in traffic for the year, it would seem that tourism traffic and online reservations have already taken a hit this year for many reasons, but the shutdown made business even worse.

Overall YOY Change in Sales
  September Shutdown Week 1 % Variance
Gross Sales 1.4% -0.1% -1.5%
Covers -2.9% -7.6% -4.6%

 

In addition, we found that the lunch and breakfast meal periods specifically struggled during the first week of the shutdown. This would lead us to believe that without “power” business breakfasts and lunches, D.C. restaurants are struggling to keep up with last year’s numbers.

Lunch & Breakfast Sales
  September Shutdown Week 1 % Variance
Gross Sales 0.3% -3.3% -3.6%
Covers -0.7% -5.4% -4.7%
 

 

Finally, we conducted a food vs. beverage analysis to see if diners are “drinking away the pain” of the shutdown. Not to our surprise, beverage sales have actually increased since the government shutdown, while lagging food sales are the reason for D.C. restaurants’ post-shutdown struggles. (We actually saw a similar trend when we did an analysis last year after Hurricane Sandy.)

Food Sales
  September Shutdown Week 1 % Variance
Gross Sales 0.3% -3.3% -3.6%
 
Beverage Sales
  September Shutdown Week 1 % Variance
Gross Sales -1.8% 1.3% 3.1%