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Restaurants learn the downside of patio seating

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Ark Restaurants operates some of the largest restaurants in the nation, from 1,000-plus-seat Bryant Park Grill in New York City to the like-sized Sequoia along the Potomac River in Washington, D.C. That kind of capacity usually delivers sales of equally gargantuan proportions, but the intake this summer and fall was significantly cut by a combination of Mother Nature and the company’s reliance on outdoor seating.

Sales at Bryant Park fell 12% during the three-month stretch ended Sept. 29, largely because rain and snow kept its 500 or so outdoor seats unused for days at a time, CEO Michael Weinstein explained to investors this week. Sequoia’s sales tanked by 18% because 500 patio seats often sat empty. 

Ditto for the 600 outdoor seats at an Ark-managed behemoth next to Bryant Park Grill, Summer Porch, and the 500 seats sported by a third restaurant in the midtown area, 42nd St. Cafe.

“The reliance on weather is reality, unfortunately,” Weinstein told financial analysts.

The pain was deepened by New York City’s new predictive scheduling law, which penalizes restaurants for changing work schedules within 14 days of a shift, as Ark might otherwise have done when the weather turned sour. “If they're on the schedule, they get paid,” said Weinstein.

Ark was hardly alone is shaking a fist at Mother Nature this financial reporting season. Del Frisco’s Restaurant Group has an abundance of restaurants in the Northeast, where rain fell 30 more days this third quarter than it did in the year-ago period, doubling the total downfall, according to CFO Neil Thomson. Adding in the impact of hurricanes and torrential rain in Texas, another stronghold of the company, and patio sales fell 22.7% on a comparable basis for Q3, Thomson told financial analysts. 

The damage hasn’t been limited to polished-casual or fine-dining restaurants, either. The Good Times regional quick-service burger chain and its casual-dining sister concept, Bad Daddy’s Burger Bar, recently lost 10 operating days in North Carolina because of snow storms. The chains’ other main market, Colorado, contended with a fivefold increase in precipitation in recent months, along with an unseasonable drop in temperatures. 

 “That's all very impactful to Good Times [corporate] comp sales as we lose our walkup and patio business during those times,” CEO Boyd Hoback lamented to financial analysts. 

While everyone is talking about the weather and its impact on patio areas, at least two major restaurant operators are doing something about it. Darden Restaurants is already enclosing some of the patio areas of its concepts, which include Olive Garden and Seasons 52. The moves “have given us an extra 25 seats in restaurants, [and] that gives us full utilization of that space year-round,” CEO Gene Lee said in announcing his charge’s financial results for the quarter ended Nov. 25. 

With the same goal in mind, Buffalo Wild Wings introduced a new prototype this week that features patio seating under a skylight-type awning, with exterior garage-style roll-up doors that can be opened or closed to reflect weather conditions. 

 

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