Since the start of the virus pandemic, various consumer services such as restaurants, bars, and clubs have moved outdoors to reduce the risk of virus spread.
As a result, supplies of propane tanks have been depleted across the country as demand for small cylinder tanks jumps 75% year on year.
FT notes that hardware stores, such as Ace Hardware, Lowe’s, and Home Depot, are having extreme difficulty keeping up with the demand for portable steel tanks as demand is off the charts.
Propane Education & Research Council said demand for propane retail-size cylinders would be around 500 million gallons this year, up from 284 million in 2019.
At the start of fall, we cited a Goldman Sachs report detailing how restaurants approved for outdoor dining in public areas in NYC have risen from 10% to more than 40% in just a few months. Similar outdoor dining trends have been seen in nearly all US metro areas as state and local governments limit indoor dining.
So far, restaurants in NYC have had a mild winter. Many of these shops are stocked up with propane cylinders and heaters to preparing against colder weather. Goldman noted if daily average temperatures slide below 40°F – then it would be associated with a steep drop off in consumer activity at eateries.
Complicating things for restaurants, states and governments have been limiting indoor dining and outdoor as virus cases uncontrollably spread across the country.
For more on the buying panic, the largest US propane retailer, UGI, recently reported that its AmeriGas cylinder exchange service hit record volumes through the end of September. UGI delivers tanks to many retailers, including Home Depot.
Suburban Propane Partners, another propane retailer, said its business segment that sells retail-size cylinders has “significantly benefited by all of the outdoor living activities.”
Roger Perreault, UGI executive vice-president, said they’ve been buying new steel tanks to keep up with massive demand:
“We have been investing significantly in additional cylinders to bring into the market,” Perreault said.
A local hardware store, called Strosniders Hardware, in the Maryland suburbs of Washington, said all restaurants within a square mile of the store are using outdoor patio heaters.
“All the restaurants around here are using outdoor patio heaters. There’s probably 300-400 restaurants within a square mile of that store,” said Strosniders Hardware’s owner Bill Hart.
Internet searches for “propane heater” have erupted over the last three months as Old Man Winter is set to reappear in early December.
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Author: Tyler Durden