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PUBLISHER'S VIEWPOINT
July 2001
Where's the Downturn?
I
got confused. I’ve heard conflicting reports on how the economic
uncertainty (how can I call it a downturn when we haven’t had a
real down quarter in GDP yet?) is affecting foodservice and
equipment and supplies. On the one hand, many E&S manufacturers
tell us they’re off versus last year. But others say their sales
remain strong and growing. And most importantly, because many of
you spec the stuff and cut the purchase orders, operator
business appears to be holding up quite well, thank you. So I
could see it was a mystery, and I went in search of clues. After
all, all our livelihoods depend on it.
First, I called
Bob O’Brien, president of NPD/CREST, the research organization
that many chains depend on for traffic and consumer behavior
trends. He says, “Consumers’ use of restaurants,” a total
traffic indicator that includes occasions at chains and
independents, “has been flat the last four quarters.” And if
we’re looking for indicators, he adds, “Chains have actually
fared a little better in the second quarter.”
Then I
remembered that Brian and Jen checked on domestic unit growth
activity of the Top 25 chain concepts in the first quarter. And
in spite of what we’d heard—that building had slowed—the editors
found most big chains built and/or renovated at least as many
domestic units—or more—during the first quarter 2001 vs. the
same quarter 2000.
We already knew
institutional operators are continuing to build and renovate
aggressively. We hear it from consultants and manufacturers.
So I called a
good friend at a really big manufacturer, with balanced lines.
He said, “Yeah, we’re off a bit and some of my competitors are
off more.” Hmm. This is the kind of info that confuses me,
though I also know these folks tend to be more tied to big QSRs
and exports.
So I called my
partner Ken Gill, who knows nearly everybody. “I get the sense
many manufacturers are doing better than they expected,” Ken
said. “But call Chris Spurry. I had an interesting discussion
with him yesterday.”
Chris is a rep
in the mid-Atlantic with a balanced dealer, spec and chain
business. “Sure this year is not as strong as ’99 and 2000, but
I believe those were the best two years we’ve ever seen in E&S.
I also think many factories panicked back in February and March
when all operators got cautious. The truth is we’re doing okay.
It’s more competitive, but business is steady.”
I think Chris is
right. The market is flat—I like steady better—following several
record years. Now, if we can just keep the public markets and
the consumers from getting too nervous, we’ll be okay.
Cheers,
Robin Ashton
Publisher
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