What the Waffle House Index Says About a Storm

If the Waffle House Index goes to red, it’s time to panic.

At any hour, day or night, 365 days a year, you can eat at a Waffle House. So when red says it’s closing, the diners notice.

And so too does the Federal Emergency Management Agency (FEMA).

The Waffle House Index

Government

As Hurricane Charley was moving through Florida in 2004, the state’s emergency management people stepped out for a fast meal at Waffle House. The next day they went to another one. At both they noticed a limited menu of non-perishables and quickly realized that restaurant operations could be a handy disaster metric.

Because Waffle House almost never closed, it was perfect for color coding. Red meant a close; yellow was limited operations; green said all was close to normal. In addition to their traditional criteria like power outage numbers, government officials realized they could use the Waffle House Index unofficially to judge a storm’s impact.

Waffle House

Waffle House management appears to grasp emergency planning. Before any storm, they’ve readied food safety, IT specialists, and loss of water and power back-ups.  They know when to move supplies to a local warehouse and how to transfer “jump teams” to restaurants without staff.

Below, you can get an idea of how they plan for emergencies. As economists we can appreciate the incentive at the end of this emergency notice from 2016. I added the arrow and larger print:

During Hurricane Matthew in 2016, the staff at a Murrells Inlet, S.C. Waffle House waited for the tiles to fall from the ceiling before they closed. Meanwhile, as of 1:37 yesterday, among the 230 Waffle House establishments that were in Tropical Storm Florence’s path, 17 were closed.

Our Bottom Line: Leading Indicators

We could call the Waffle House Index a leading indicator.

For the U.S. economy, a leading indicator predicts the ups and downs of business activity during the next several months. When we look at the components of the Conference Board’s Leading Economic Index (LEI), we would find a list that includes new building permits, the S&P 500 stock index, and average hours worked in manufacturing.

Reported on August 17, 2018, a July LEI increase suggests the U.S. economy will continue expanding:

Sort of similarly, the Waffle House Index signals when infrastructure and food and fuel supply chains will recover from storm damage.

My sources and more: Thanks to The Economist for alerting me to the Waffle House Index. From there, I discovered  countless references to the Waffle House Index (and wondered why I had not known about it sooner). At NPR they interviewed FEMA’s former head while FiveThirtyEight had the supply chain details. And as for the Tropical Storm Florence connection, The Washington Post and Fox News Insider were ideal.