Bloomberg News

Restaurants See Sales Jump as East Coast Looks for Food

October 31, 2012

Restaurant chains including Boston Market Corp., Starbucks Corp. (SBUX:US) and Applebee’s may see a boost in sales as consumers flock to eateries after Hurricane Sandy flooded the East Coast, leaving millions without power.

While restaurants may be “hit initially” because of store closings, sales will start picking up as consumers who lost power along the East Coast eat out more frequently, said Stephen Anderson, an analyst at Miller Tabak & Co. in New York.

“There is cabin fever -- the same thing happened after Hurricane Irene last year,” he said. “October’s loss will be November’s gain” for restaurants, Anderson said.

Sandy, spanning 900 miles, caused flooding, high winds and fallen trees that cut power to about 8 million customers from South Carolina to Maine. Economic damage and losses from the storm may be as much as $20 billion, according to Eqecat Inc., a risk-management company in Oakland, California.

Texas Roadhouse Inc. (TXRH:US) had a surge of customers in Long Island yesterday, said Travis Doster, a spokesman for the Louisville, Kentucky-based company. Power may not be restored for as many as 10 days to more than 2 million New York customers, mostly on Long Island and in New York City.

“Usually Tuesdays, we’re not as busy, and we had the whole restaurant packed,” Stefanie Diaz, service manager at a Texas Roadhouse in East Meadow on Long Island, said in an interview. Customers wore pajamas and children brought pillows to the restaurant, where they charged laptops and mobile phones, she said.

40-Minute Wait

There was a 40-minute wait to eat from about 4:30 p.m. to 9 p.m. yesterday, said Keith Deluise, managing partner at the eatery.

“The biggest increase was everybody was drinking” and alcohol made up 20 percent of sales (TXRH:US), compared with 12 percent on a regular day, he said.

Boston Market, which has about 470 company-operated U.S. stores, is seeing a jump in sales at its Long Island locations that are open, Bob Gerard, director of operations for stores in New York and Massachusetts, said in an interview yesterday.

“The lines are out the door,” Gerard said after visiting a store in Deer Park on Long Island. “They’re doing a very brisk business” and customers are buying more family meals to feed four, five or six people, he said.

Rotisserie Chicken

The closely held rotisserie-chicken chain is using car service and taxi cabs to get employees into the New York City area to staff stores, he said. Of the company’s 70 locations in Gerard’s district, about 50 are open, he said.

Jeremiah Vigue opened his Starbucks store in Groton, Connecticut, at 8:30 a.m. yesterday and ran out of the extra food he had ordered. There was a line out the door for six hours straight, the store manager said in an e-mail.

“We did about double the business in sales today, and we had ordered double the milk and food,” Vigue said. “We went through all the food, especially the warmed foods.”

The coffee shop is still getting its orders and Vigue is “optimistic” about meeting demand, he said. “If our delivery comes in tonight then I think we will have no problem getting the food needed.”

About 150 Starbucks cafes are closed in the New York City area, mostly because of power failure, said Haley Drage, a spokeswoman for the Seattle-based company. The company had previously shut 1,000 of its 10,900 U.S. locations.

Applebee’s Sales

Sales were up yesterday for Apple American Group LLC’s about 90 East Coast Applebee’s, Greg Flynn, chief executive officer of the Independence, Ohio-based company, said in an interview. The restaurant operator has 437 U.S. locations.

Applebee’s stores in southern New Jersey and northern Delaware saw a 24 percent increase in sales yesterday from the same day last year, Flynn said. In Apple American’s New England region, which doesn’t include the New Jersey and Delaware locations, sales were up 35 percent.

“We’re very busy,” Flynn said. “There’s a lot of people without power and a lot of people have been sitting inside for a few days and want to get out.”

Applebee’s is owned by Glendale, California-based DineEquity Inc. (DIN:US)

Papa John’s International Inc. (PZZA:US) has some locations open in New York City that are delivering pizzas if they’re able, Darryl Carr, a spokesman for the Louisville, Kentucky-based chain, said in an interview.

“Sales in those stores have increased,” he said. “They’re open for business and have been serving a lot of people.”

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net


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Companies Mentioned

  • SBUX
    (Starbucks Corp)
    • $77.48 USD
    • -0.33
    • -0.43%
  • TXRH
    (Texas Roadhouse Inc)
    • $26.52 USD
    • -0.07
    • -0.26%
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