Virus threatens $6bn in St Patrick’s Day spending in US
Parades in Boston, Seattle, and LA have been cancelled, meaning one of the biggest revenue generating days for bars will be curtailed, write and
St Patrick's Day will be a major test of how much the coronavirus will impact America’s $13 trillion consumer economy.
The March 17 holiday is known for green garb and beer, and is one of the biggest revenue-generating days of the year for many bars and a boon for brands such as Guinness and Jameson whiskey. Americans were expected to spend $6.2bn (5.5bn) on the event, the National Retail Federation said last month, citing survey data from Prosper Insights & Analytics. No less than 56% of Americans planned to celebrate.
But much has changed over the past two weeks. As the virus spreads across the US, a slew of events, including major conferences and festivals, have been postponed or cancelled. Many communities are now practicing social distancing.
Boston has cancelled its parade, while some of the hardest hit areas, including Seattle and Los Angeles, have also scuttled parades scheduled for this weekend. Parade and festivities have also be cancelled in Ireland. As of now, parades in the Irish-American enclaves of New York and Chicago are still on.
“It’s turning into a tougher and tougher business, and St Paddy’s was the one day of the year where we could get back on track,” said Noel Donovan, managing partner at Bloom’s Tavern, an Irish pub in Manhattan’s midtown. The bar had just two customers around 1pm on Monday during what’s usually a bustling lunch business. And in the past few days, a handful of reservations for big parties have been withdrawn.
If they cancel the New York City parade, it will be a big blow.
So far, there have been few concrete signs that Americans are pulling back on discretionary spending in a major way since the virus outbreak accelerated in the US more than a week ago. Movie box office receipts, for example, mostly met expectations last weekend.
In Chicago, Kieran Aherne, regional manager at an Irish pub called Fado, hasn’t seen an impact from the virus yet. The city’s parade on Saturday is the biggest revenue generator of the year. In the past, it’s meant over $100,000 in a weekend and then another bounce comes on actual St Patrick’s Day.
“We’re hopeful,” said Mr Aherne.
Coronavirus fears did not scare away thousands of revellers over the weekend in Hoboken, New Jersey. Sean Sullivan, general manager of Wicked Wolf Tavern, said business was better than last year for the city’s LepreCon bar crawl. About 1,000 people filtered through the bar’s doors on Saturday, said Mr Sullivan, adding that some people joked about the virus but no one raised any serious concerns.
Over the past 10 days, visits to stores in the US have softened, but it’s still too early to tell how deep of a shift is taking place, according to Craig Johnson, president of researcher Customer Growth Partners. St Patrick’s Day presents an intriguing test because most of the spending is food and alcohol and relies on public events.
It’s also celebrated by younger consumers — the National Retail Federation’s report from last month said 73% of participants aged 18-34 planned to take part.
“The one thing we can say from past downturns and recessions is that one of the least vulnerable things is alcohol consumption,” said Mr Johnson. But people are being cautious and going to a bar “is not the ideal place to be right now”.
In lower Manhattan just a three-minute walk from the New York Stock Exchange, Robert Mahon isn’t as worried about St Patrick’s Day as much as the big banks in the area telling employees to postpone events. Broadstone Bar & Kitchen has three floors and can host parties for 250 people. In just the past few days, three reservations for more than 50 have been cancelled.
“It’s going to affect our bottom line, and we’ll have to adapt,” said Mr Mahon, Broadstone managing partner, which, along with Bloom’s Tavern and 10 other New York watering holes, is part of the Pig ‘n’ Whistle Group.
That will mean eventually cutting back on labour and perhaps closing some space. “Then hopefully come summer, we’ll have an uptick in these corporate events being rescheduled. That’s what we’re hoping.”
Americans have shown the ability to bounce back quickly. Sales actually rose during the Christmas-shopping season after the September 11 terror attacks, said Mr Johnson.
“The good news is no matter what the event is — an earthquake or terror attack — we’re optimistic we’ll get through this,” he said. “American consumers are amazingly resilient.”
