Foodservice Equipment Reports Fortnightly
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Welcome to FER Fortnightly Online Newsletter
February 13, 2007








Regulatory Report:
Sponsored by:
STAR Service & Parts/Enodis
How Many Californians Does It Take To Change A Lightbulb?
Worcester Sees Through FOG, For Now
Hamilton, Ontario, May Require Food Safety Training
Chicago Foie Gras Ban So Much Chopped Liver

Industry Report:
Sponsored by:
Server Products
NRA, NRAEF To Honor Five For Industry Education
Enodis Opens New Facilities In China
ASHRAE Offers Guide To Green Building Design, Operation
Taco John's Wins Food Safety Award
Private Sector Tops EPA's Green Power List



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In This Section:
Strong 4Q E&S Sales Hint At Possible Slower 1Q, MAFSI Finds
Jump In Traffic, Same-Store Sales, Drives NRA Index Higher
Forecast For Energy Prices Revised Downward

This issue's Regulatory ReportSponsor: STAR Service & Parts/Enodis
Industry ReportSponsor: Server Products
Economic Report HOFEX 2007

Strong 4Q E&S Sales Hint At Possible Slower 1Q, MAFSI Finds
The MAFSI Business Barometer hit a second straight quarter of 4.5% sales growth in the fourth quarter of 2006, according to the Manufacturers' Agents Association for the Foodservice Industry. But the fourth quarter gain, which compares sales versus the same quarter the prior year, was driven in part by dealers stocking up to avoid price increases and may lead to slower sales growth in the first quarter of '07, the group reported. The reps surveyed forecast growth of 3.3% in the first quarter, significantly below recent forecasts.

For all of '07, the forecast is for E&S sales growth of 4.5%, with stronger forecasts in the South and Northeast and slower expectations in the Midwest and West. This forecast is also a bit muted compared with those of the past two years. Last year, the reps forecast growth of 5.4% for '06. The '05 forecast was 5.6%.

Strong equipment sales drove the fourth quarter gains. Equipment sales rose 4.7%, the Barometer reports. Tabletop sales were up 4.3%, supplies rose 3.9% and furniture sales gained 3.2%.

The West showed the strongest sales, with an overall rise of 5.8% for the quarter. The South was up 4.9%, and Canada rose 4.8%. The Northeast and Midwest lagged with 3.8% and 3.4% gains respectively.

 

Section sponsored by HOFEX 2007

Jump In Traffic, Same-Store Sales, Drives NRA Index Higher
A significant rise in customer traffic and same-store sales in December pushed up the overall Restaurant Performance Index fielded monthly by the National Restaurant Association. But the Expectations Index, which anticipates conditions six months on, fell slightly.

Three of the four components of the Current Situation Index rose in the December survey, which tracks changes versus the previous month. Customer traffic jumped a full two points. Same-store sales were up 1.7 points and the labor component, an indicator of hiring, rose 1.3 points. The overall Current Situation Index rose 1.2 points, to 101.4. All measures are above the Index value of 100, the dividing line between expansion and contraction. Only the capital expenditure component, which measure purchases during the past three months, fell slightly, to 100.1.

In the Expectations Index, only the outlook for same-store sales rose in December. The overall Expectations Index was off a slight 0.1 point, to 101.9. The outlooks for capital expenditures, staffing and business conditions all fell slightly.


Section sponsored by HOFEX 2007

Forecast For Energy Prices Revised Downward
In good news for foodservice, the Federal Department of Energy's Energy Information Administration has lowered its forecasts for crude oil prices for both 2007 and '08. Meanwhile, the University of Michigan's Consumer Sentiment Index hit its highest point in January since December '04.

The EIA lowered its projection of the average cost of a barrel of oil to $59.50 for '07 and $62.50 for '08. The previous forecast had called for an average price per barrel of $64 for both years. Its forecast for natural gas remained essentially unchanged for both years at $7.10 per thousand cubic feet for '07 and $7.60 for '08. Gasoline prices in January ran about 7% lower than a year earlier, according to data from the Automobile Association of America. AAA does expect gas prices to rise again with the summer driving season, but not reach the levels seen in '06.

Also of note, Michigan's Consumer Sentiment data for January, as reported by Reuters, held with the preliminary gains reported earlier in the month. The Sentiment Index rose to 96.9 from 91.7 in December. The Expectations Index also rose strongly to 87.6 from 81.2.



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