Season cycle affects businesses’ bottom lines during summer

When thousands of students leave Oakland deserted for the summer, businesses must adapt to… When thousands of students leave Oakland deserted for the summer, businesses must adapt to remain profitable.

With the changing of the seasons comes a change in practices for many businesses in college neighborhoods. Experts and economists claim there are natural cycles of business, and businesses themselves just do what they can to make a profit.

Jarrod Tanweer, a manager at Dave & Andy’s Homemade Ice Cream on Atwood Street, said the business adjusts the number of employees and the amount of ice-cream-making materials to fit the different seasons.

“During the summer, we are a destination for people,” Tanweer said on a hot summer day. “Many people come to Oakland just to get dinner and get Dave & Andy’s.”

Although ice cream is typically a summertime treat, he said the business receives the most foot traffic during the warm months of the fall and the later part of spring when school is still in session and students are abundant in Oakland.

During the summer, Dave & Andy’s employs about 12 part-time workers and receives daily shipments from its dairy provider. The business stays open year-round, but the winter months see only three part-time employees. Winter shipments are sometimes cut back to only once a week.

“Most ice-cream stores shut down during the winter, but we can stay open because we sell ice cream to restaurants,” Tanweer said, referring to different shops throughout the Pittsburgh area.

And just as Dave & Andy’s alters its business model for the different seasons, so do many other businesses in various sectors of the economy.

Christopher Briem, a regional economist with Pitt’s Center for Social and Urban Research, said the economy of a region changes with the seasons, as some industries are better suited for different types of weather.

“There is a lot of seasonality in the economy,” Briem said.

Locally, he said that construction picks up during the summer months.

Jason Koss, the director of industry relations at the Constructors Association of Western Pennsylvania, said that the weather affects both the materials and the safety of construction jobs. Because of this, the summer is the time when most roadway construction is conducted.

“In the winter, contractors have a harder time due to the materials not cooperating,” Koss said, referring to concrete and asphalt, two materials that need heat to cure properly. “You can’t encapsulate a highway in the middle of winter to heat it.”

During the cold months, wet and icy weather create safety hazards for workers, and materials that need heat must get it through means other than the sun. This adds costs to the constructors, so many companies lay off workers during the winter months.

But come summertime, these workers are rehired to handle the increased workload.

Additionally, the agricultural sector of the economy picks up during the summer months. Briem said that this is true for states located in the northern part of the country, such as Pennsylvania, but that some states’ agricultural production remains fairly constant with the changing seasons.

One area of the economy that slows during the summer months is the education sector, particularly that of public, government-run education, Briem said. During the summer months, most public schools are closed, and government employment shrinks accordingly.

Another sector that produces a summertime economic boom is that of travel and leisure, he said. Summer is the season when free time is most abundant, and many people choose to travel or go and spend money at a hospitable restaurant or hotel.

“Places that are summer vacation spots are the places you’ll see seasonal changes,” Briem said, adding that some areas and economies don’t see major seasonal fluctuations.

For example, Briem said, the financial and banking economies don’t typically fluctuate with the seasons.

Andrew Blair, vice provost for faculty affairs and professor of business administration and economics in Pitt’s Katz School of Business, said that nearly every line of business has some form of seasonality which alters how a business manages its operations.

“Summer is lag in Oakland for some businesses,” Blair said. “All those fast food businesses on Forbes Avenue all need to cope with lower student traffic during summer.”

He said that although there is less student traffic for certain restaurants and businesses in Oakland, they still need to cover fixed costs, such as the rent or lease for the building and gas and electric bills. Additionally, if they choose to stay open, they must cover other variable costs.

“If they can’t cover out-of-pocket costs,” he said, referring to additional labor, utilities and materials needed to remain operational, “then you would shut down the enterprise in the summer.”

He said that many places that are travel destinations — beaches and other tourist spots — tend to shut down during the winter and hire many people during the summer.

And in Oakland, some businesses have a reputation that keeps their business consistent during the time when students are elsewhere.

Primanti Bros., a main attraction on the Pittsburgh cuisine scene, remains open year-round at its Oakland location. Meghan Powell, a manager at the restaurant, said the business’s practices typically remain the same throughout the year, regardless of whether school is in session.

She added that many people come to Primanti’s from UPMC for lunch or dinner, and others come to watch sporting events, such as Penguins hockey, Pirates baseball and Pitt football games.

“We’re pretty famous,” Powell said. “So whether the kids are here or not, we get the tourist crowd.”