Mother nature rocks dinner houses in Jan

Nation's Restaurant News, April 11, 1994 by Malcolm M. Knapp

Mother Nature seemed to dominate the month of January as dinner-house sales were either frozen out by th winter storms that slashed across the Eastern half of the United States or briefly shaken up by the earthquake that rocked Los Angeles.

In the East frigid temperatures and nearly impassable roads made it difficult for people to leave their homes. Consequently, operators suffered, too. The worst-hit area on a comparable- and all-store basis was the Middle Atlantic region -- comprising New York, New Jersey and Pennsylvania -- which was down double digits from the same period last year. The Middle Atlantic states were followed in severity of impacdt by the New England regioin and then the East North Central region -- comprising Illinois, Indian, Michigan, Ohio and Wisconsin.

Conversely, the Los Angeles earthquake of Jan. 17 made it difficult for people to stay in their homes. Based on the extensive media coverage at the time, it is reasonable to assume that restaurants would have suffered a sharp drop in sales as a result of the upheaval. However, the impact on sales in California was quite modest compared with the decline in the East and Midwest. In fact, few restaurants in Los Angeles were out of action for very long.

In January only one region showed positive same-stores sales at dinner houses with the remainingg 10 Knapp-Track regions logging negative same-store sales. Only one region showed improvement from December's results, while 10 were down.

Ironically, the sole region to sho improvement was California -- despite the earthquake. In addition to California, the best-performing regions were Mountain, Texas and Florida. The worst-performing were Middle Atlantic, New England, East North Central and South Atlantic.

The spread between the best-performing region and the worst-performing region was 15.2 percentage points, a considerable expansion from December's 7.3 percentage points and November's 10.7 percentage points.

With regard to guest counts, only the Mountain region was in the positive column. Alll of the remaining 10 Knapp-Track areas showed negative results. The percentage-point spread in guest counts was 21.5 percentage points, substantially higher than December's 13.1-percentage-point spread or . even November's 15.7 percentage points.

Same-store sales were down -0.5 percent in January with same-store guest counts down - 5.6 percent. The spread between same-store sales and guest counts narrowed to 0.6 percentage points, well under the 1.6-percentage-point spread of April 1992.

In January, if we remove California, the remainder of the United States showed a same-store decline of -.53 percent -- the first time in recent memory that the U.S. result was lower without California.

But despite the sagging numbes, numerous winter storms and a dramatic earthquake, consumer confidence rose 2.8 points in January on the overall Consumer Confidence Index -- bringing it up to 82.6. The "Present Situation" component of the Index rose a strong 5.8 points, to 67.6. The "Expectations" component -- which projects consumer expectations six months from January -- rose 0.8 points to 92.6.

The public's intention to buy such durable goods as automobiles, homes and major appliances remained quite strong during January. Homes with a head-of-household between the ages of 35 and 54 reflected the largest improvement on the confidence index. The 55-and-over group showed a modest decline, while the under-35 segment posted a slight gain.

In geographic terms the Mountain region exhibited the highest level of confidence, while New England had the lowest level.

The jobless rate was 6.7 percent in January. This number, while higher than that reported for December, was calculated by a new method, which asked different questions and is considered to be a more accurate reading of the employment and unemployment picture.

According to a computer model at the Bureau of Labor Statistics, if the new January survey method had been applied to the previous month, the unemployment rate in December would have been 7 percent. One of the more intriguing statistics from the new household survey is that 6,756,000 people -- or 5.6 percent of those employed -- held two or more jobs in January. In general, those people holding down two positions worked at one full-time job and one part-time job. However, 174,000 men held two full-timejobs -- twices as many as women -- while 920,000 women held two part-time jobs, nearly twice as many as men.

The payroll survey did not change method. The encouraging news is factory payrolls increased 26,000 in January -- the fourth consecutive monthly rise. Among major states California posted the worst jobless rate, at 10.1 percent. That was followed by Florida, at 7.5 percent; Michigan, at 7.2 percent; Michigan, at 7.5 percent; Massachusetts at 7.2 percent; and New York at 7.1 percent. The lowest rates for large states were North Carolina, at 4 percent; Texas, at 6 percent; and Pennsylvania, at 6 percent.