Coronavirus Threatens $6 Billion In St. Patrick’s Day Spending
St. Patrick’s Day will be a major test of how much the coronavirus will impact America’s $13 trillion consumer economy
(Bloomberg) -- St. Patrick’s Day will be a major test of how much the coronavirus will impact America’s $13 trillion consumer economy.
The holiday, set for March 17 and known for green garb and beer, is one of the biggest revenue-generating days of the year for many bars and a boon for brands such as Guinness beer and Jameson whiskey. Americans were expected to spend $6.2 billion 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 U.S., a slew of events, including major conferences and festivals, have been postponed or canceled. Many communities are now practicing social distancing. Boston has canceled its parade, while some of the hardest hit areas, including Seattle and Los Angeles, have also scuttled parades scheduled for this weekend. Festivities in Ireland, including Dublin, are not being held, either. 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 1 p.m. 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 And in the past few days, a handful of reservations for big parties have been withdrawn.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 U.S. more than a week ago. Movie box office receipts, for example, mostly met expectations last weekend.
‘Hopeful’
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 more than $100,000 in a weekend and then another bounce comes on actual St. Patrick’s Day.
“We’re hopeful,” Aherne said.
Coronavirus fears did not scare away thousands of revelers 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 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 U.S. have softened, but it’s still too early 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 NRF’s report from last month said 73% of participants ages 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,” Johnson said. 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 canceled.
“It’s going to affect our bottom line, and we’ll have to adapt,” said Mahon, the managing partner for Broadstone, 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 labor 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 Sept. 11 terror attacks, Johnson said.
“The good news is no matter what the event is -- an earthquake or terror attack -- we’re optimistic we’ll get through this,” Johnson said. “American consumers are amazingly resilient.”
To contact the reporters on this story: Matt Townsend in New York at mtownsend9@bloomberg.net;Angelica LaVito in New York at alavito@bloomberg.net
To contact the editors responsible for this story: Anne Cronin at acronin14@bloomberg.net, Jonathan Roeder, Sally Bakewell
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