The March college basketball playoffs have emerged as a significant sales opportunity for restaurants far beyond the heavily marketed national chains, even if they don’t have a hometown team in the tournament, according to new research.
Nationwide, the NCAA basketball tourney delivers an average sales pop of 2.4% to independent and regional-chain restaurants, regardless of location, the data show. If an operation has a hometown team in the contest known as March Madness, that figure climbs by another 9.4% over the course of the tournament, according to the findings, but with plenty of zigs and zags.
For instance, on days when that hometown team is playing, the sales increase is tempered to a 6.2% premium over the business that operations elsewhere snag. The figures suggest fans stay home to root on their team when it’s playing, but will peel themselves away from the living room TV if their local squad is not playing that night.
Yet the keenness of the competition also appears to figure into the turnout level. During last year’s tournament, restaurants in Lawrence, Kan., home of the University of Kansas Jayhawks, saw a sales spike averaging 48% on the days the top-contending squad played.
The findings, gleaned by business software company Womply from customer transactions, show that sales will continue to escalate as long as a local team stays in contention for the national championship. If a restaurant is in or near the locale of a team that plays in just the first round, it will see an average sales rise during March Madness of 3.2% above the nationwide mean increase. But that premium will climb to 11% if the team makes it to the Sweet 16 round, where the field has narrowed to 16 contenders for the championship title.
Domino’s Pizza said it sold 2 million pizzas just during the Final Four and championship game during last year’s NCAA playoffs.
Casual-dining and pizza chains have long appreciated the sales bump that March Madness can provide. When Buffalo Wild Wings was a public company, the franchisor would alert shareholders when The University of Ohio had been eliminated from the competition, since that would have a material effect on restaurants in Ohio, where the chain had an abundance of units.
The roughly two-week stretch of games has become a major promotional period for chains. Buffalo Wild Wings’ extensive marketing efforts include the giveaway of a restaurant to a patron who correctly picks the winner of every game in the tournament.
Domino’s is offering a 50% discount on pies ordered between now and March 24.
The tournament’s effect on independent restaurants, including ones without a team in the contest, has been difficult to assess.
Womply says its research and analysis is based on the 2018 transactions of some 42,000 local restaurants.