As Hurricane Helene and Hurricane Milton swept across the Southeastern U.S., the storms left a path of destruction in their wake.
Amidst areas spanning South Carolina, Georgia, Tennessee, Florida, Virginia, and North Carolina, restaurants were severely impacted.
This came after facing headwinds from a challenging economic environment.
Although the restaurant industry was undoubtedly hit hard by both hurricanes, the rebound has been surprisingly fast.
| State | Y-on-Y Comp Drop Caused in Week(s) of Hurricane(s) Occurring* | Overall Y-on-Y Comp. Drop Caused by Hurricanes** |
|---|---|---|
| Florida | -23.3% | -6.8% |
| Georgia | -9.9% | -2.4% |
| North Carolina | -5.0% | -1.3% |
| South Carolina | -8.2% | -0.4% |
| Tennessee | -3.6% | -1.2% |
| Virginia | -6.0% | -2.0% |
| USA overall | -4.7% | -1.4% |
All numbers rounded to the nearest .1 of a decimal place.
*Cumulative total of all declines in weekly Y-o-Y comp. sales recorded across affected states in week ending 9/29/24 (week of Helene), 10/6/24 (week after Helene when some restaurants continued to experience impact) and 10/13/24 (week of Milton) in comparison to 4-week average recorded between week ending 9/1/24 and 9/22/24 inclusive.
**Cumulative total of weekly Y-o-Y comp. sales recorded between week ending 9/29/24 (week of Helene) and week ending 10/27/24 in comparison to 4-week average recorded between week ending 9/1/24 and 9/22/24 inclusive.
Projections V.S. Updated Data
Restaurant sales in multiple states saw a sharp decline during the week ending September 29th, as Hurricane Helene forced many to temporarily close their doors.
When we originally forecasted the numbers, widespread closures and substantial effects on sales were rampant.
However, after pulling the latest data, we are seeing a much swifter recovery than we expected.
Then, after examining the most recent data, we started to see recovery the week ending 10/20/24.
Effects of Hurricanes Helene and Milton – Weekly Y-on-Y Comp. Sales Sept. 1 – Oct. 27 2024
| State | Week Ending 09/01/24 | Week Ending 09/08/24 | Week Ending 09/15/24 | Week Ending 09/22/24 | Week Ending 09/29/24 | Week Ending 10/06/24 | Week Ending 10/13/24 | Week Ending 10/20/24 | Week Ending 10/27/24 |
|---|---|---|---|---|---|---|---|---|---|
| Florida | 3.8% | -0.5% | -0.2% | 0.4% | -3.6% | -0.9% | -16.2% | 5.8% | 3.6% |
| Georgia | 2.0% | 1.7% | 1.8% | 1.4% | -8.1% | 1.8% | 3.9% | 3.4% | 3.5% |
| North Carolina | 1.9% | 2.4% | 2.5% | 2.2% | 2.8% | 2.7% | 3.3% | 2.5% | 1.8% |
| South Carolina | 3.0% | 2.7% | 2.8% | 2.1% | -5.6% | 8.5% | 3.1% | 3.6% | 3.5% |
| Tennessee | -0.6% | -0.4% | -0.8% | -0.7% | -3.1% | -1.7% | -0.7% | 1.1% | 1.2% |
| Virginia | 1.1% | 0.3% | 0.0% | 2.6% | -1.8% | -1.5% | 0.3% | 1.5% | 1.0% |
| Week Ending 09/01/24 | Week Ending 09/08/24 | Week Ending 09/15/24 | Week Ending 09/22/24 | Week Ending 09/29/24 | Week Ending 10/06/24 | Week Ending 10/13/24 | Week Ending 10/20/24 | Week Ending 10/27/24 | |
|---|---|---|---|---|---|---|---|---|---|
| USA | 1.0% | 0.6% | 0.4% | 0.8% | -0.9% | -0.2% | -1.6% | 1.8% | 2.0% |
| USA excluding affected States | 0.7% | 0.6% | 0.3% | 0.7% | 0.1% | -0.4% | -0.6% | 1.3% | 1.8% |
Note: Hurricane Helene had biggest impact in week ending 09/29/24. Hurricane Milton had biggest impact in week ending 10/13/24.
Our data surrounding Hurricane Helene clearly indicated that Georgia and South Carolina saw the biggest drops in comp sales growth at -9.9% and -8.2% respectively.
Interestingly, although Florida saw a big hit after Milton, data indicated small positive gains in North Carolina and Georgia starting the Week Ending October 20. North Carolina saw comp sales at 2.5% the week ending October 20.
Likewise, Georgia saw comp sales at 3.4%.
Undoubtedly, these are big numbers when comparing both to overall nationwide averages and pre-hurricane figures.
Given these states were far less affected by Milton, they show how restaurant impact at the time of a hurricane are significant. But the rebound – purely in terms of restaurant performance – in the immediate aftermath of a hurricane is also swift and marked.
There are a few reasons for this:
- Because people were displaced from damaged homes, they could not use kitchens to cook, leading to an increase in eating out.
- As a result of an increase in recovery teams temporarily relocating from other states to aid clean up likely led to increased restaurant sales.
- Waves of electric outages lead to people losing the ability to safely store foods, with restaurants providing an emergency solution. So, as areas obtained electricity again and began to get “back to normal”, grocery supply chains struggled to keep up with pent up demand. . For that reason, again, restaurants provided a useful alternative.
And overall USA comp sales are at 1.5%, compared to 1.2% excluding states affected by the hurricanes the week ending October 20.
This was much better compared to the .98% and .67% we saw the week ending September 1 (i.e. before there was any hurricane impact).
This implies a swift effort to recover for the restaurant industry – both as a whole AND in the impacted areas.
Recovery by Segment
Certainly, recovery rates after the hurricanes varied by restaurant type.
The rate of recovery varied significantly by restaurant type. For example, Quick-service restaurants (QSRs) and Fast Casual led the way, with sales drop offs of -0.7% and -0.3% respectively caused by the hurricanes.
We suspect that their convenience and affordability attracted both locals and out-of-state recovery teams looking for fast meal options.
We suspect this is due, in large part, to closures and the segment’s reliance on a sit-down-meal experience.
Impact of Hurricane Helene and Hurricane Milton By Segment in the USA
| Segment | Y-on-Y Comp Drop Caused in Week(s) of Hurricane(s) Occurring* | Overall Y-on-Y Comp. Drop Caused by Hurricanes** | Estimated net effect as of week ending 10/27 |
|---|---|---|---|
| Casual Dining | -5.7% | -3.7% | +2.1% |
| Family Dining | -5.4% | -1.4% | +4.0% |
| Fast Casual | -0.8% | -0.3% | +0.5% |
| Quick Service | -2.4% | -0.7% | +1.7% |
| Upscale Casual | -5.3% | -2.3% | +3.0% |
All numbers rounded to the nearest .1 of a decimal place.
*Cumulative total of all declines in weekly Y-o-Y comp. sales recorded across affected states in week ending 9/29/24 (week of Helene), 10/6/24 (week after Helene when some restaurants continued to experience impact) and 10/13/24 (week of Milton) in comparison to 4-week average recorded between week ending 9/1/24 and 9/22/24 inclusive.
**Cumulative total of weekly Y-o-Y comp. sales recorded between week ending 9/29/24 (week of Helene) and week ending 10/27/24 in comparison to 4-week average recorded between week ending 9/1/24 and 9/22/24 inclusive.
Above all, as restaurants continue to navigate these challenges, adjusting operational strategies to accommodate unpredictable consumer demand is crucial.
Moreover, the data underlines the need for robust plans to maintain resilience in the face of natural events that disrupt typical economic activity.
Even now, despite the impacts of the hurricanes, recent data supports the hypothesis that the industry is on an upswing and recovery may have come earlier than expected.
Conclusion
While initial projections painted a pretty scary picture of hurricane impact on the restaurant industry, the subsequent weeks demonstrated strong and impressive resilience. A longer-term analysis demonstrates a much more positive outlook.
For an in-depth analysis of the current state of the restaurant industry, check out our deep dive webinar.