Med Catering manager Kamal Al-Faqih said that his catering business started slowing in the last quarter of 1990, before the Persian Gulf War began. Al-Faqih said he believes that a large Med Catering dinner at a Baltimore art museum in honor of a Kuwaiti art exhibit was canceled because of the war. Gallery officials said one reason it was canceled was fear of terrorism. The event was mentioned in an article in Friday's Business section. (Published 1/29/91)
Takeout pizza sales are up, while restaurant sales are down. Escapist movies like "Home Alone" and "Green Card" are booming at the box office, as seats at war and horror films go empty. Night-time shoppers at department stores have virtually vanished with customers rushing home to watch the latest news on television.
Though Desert Storm is raging more than 6,000 miles away, its impact is being felt at businesses throughout the Washington area -- most of which have little direct link with the large military and defense industry here. Much of the evidence is anecdotal so far, but nearly every type of business contacted this week has experienced some kind of ripple effect from the Persian Gulf War since the fighting began more than a week ago.
Sales at Domino's Pizza Team Washington, for example, have increased nearly 20 percent since the outbreak of war in the Middle East, said franchise owner Frank Meeks.
"The night they launched the attack on Iraq was one of our biggest, because people were probably glued to the television," said Meeks. "I don't like seeing business increases come in this way ... I'd rather shove a big, fat pepperoni pizza between Saddam Hussein's eyes and get back to business as usual."
Takeout food gains seem to be coming at the expense of restaurants, bars and caterers, which are waiting for business to pick back up after a sharp drop.
"People are definitely parking themselves in front of the television and making that their evening," said John Latham, co-owner of the Clyde's restaurant chain. "Business has not gone down tremendously, but it definitely has not gone up."
At Capitol Hill's La Brasserie, business has dropped 50 percent since the war broke out. "People are so busy in the office and just don't go out as much. I also think they are concerned about being out in a public place because of the possibility of terrorism," said Brasserie co-owner Raymond Campet. "People are just not in the mood to party."
That somber mood is hurting a number of caterers, including Med Catering manager Kamal Al-Faqih, who has seen business dry up quickly, especially since his firm specializes in Middle Eastern food and has many Arab and embassy clients. A large Med Catering dinner at a Baltimore art museum in honor of a Kuwaiti art exhibit there, for example, was canceled this week because of dampened moods and terrorism fears.
"There is a squeeze, and entertaining is not happening," said Al-Faqih, who added that Med Catering's storefront retail business was carrying a heavier load because of the catering cutback. "Nobody really wants to take that big plunge."
The well-known Alfalfa dinner, where Washington's biggest political honchos celebrate annually, was also nixed this past week because of the war.
"We were disappointed, but we understood," said Kevin Deverich, general manager of the Capitol Hilton, where the dinner was slated to have taken place. "It is a sensitive time."
That sensitivity is being felt by retailers here, who are already suffering with sluggish sales and sheepish consumers in the recessionary economy.
Some obvious retail categories are doing well, such as flags, wood stoves, books and maps about the Middle East and even bottled water. Military surplus outlets are reporting a huge jump in the sale of gas masks and other survival gear. At Reliable Home Appliance, sales of small televisions and short wave and portable radios are up.
But most retailers in the Washington area said the situation in the Middle East has caused consumers to be even more cautious about spending. Those volatile customer sentiments make merchants nervous and somewhat confused about what will happen in the next few months.
"We are planning conservatively," said Hecht's Chairman J. Warren Harris.
"Our store is going to react day by day," said John Whitacre, regional manager for the Nordstrom department store chain. "But we're not expecting things to get any better until everything is resolved there."
Other businesses are also developing that wait-and-see attitude in the face of uncertain economic times made even more so by the war.
Allied-Signal Inc.'s automotive division in Salem, Va., has temporarily stopped work on its new $32 million Roanoke County disc brake plant, partly because of the Persian Gulf War, after already spending about $1 million in preparations.
Melinda Bremmer of Bremmer & Goris Communications Inc. has watched a busy period for the Alexandria graphic design firm come to a nearly complete stop. "The recession had not been hurting us, since we had a broad client base, but since the war started, it slowed down immediately," said Bremmer. "I think it's because people are now preoccupied with the war and don't want to start new things."
Perhaps the best gauge of the uneven effect of the war on business here is reflected by the movie-going habits of Washingtonians. The night the war broke out most theaters were deserted, according to Freeman Fisher of the Cineplex Odeon movie chain. Business has picked up since, but not for serious films. "Flight of the Intruder," a film about Vietnam pilots or the politically heavy "Hidden Agenda," he said, are having a hard time finding audiences. On the other hand, the lighter-fare movies are packing them in.
"It's a little to early to tell, but it seems that movies with a little bit more free spirit are doing better," said Fisher. "With everything that's going on, that makes an awful a lot of sense."