Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
February 24, 2009

Regulatory Report:
Sponsored by:
Manitowoc Foodservice
Massachusetts Governor Wants To Up Restaurant Sales Tax
Plumbers Groups Connect To Study Water Efficiency Projects
Connecticut Lawmaker Pushes New Fed Food-Safety Agency
Towns In North Carolina, Ohio Hurry Toward FOG Rules
AHRI Worried That New Reefer Laws Won’t Be Enforced

Industry Report:
Sponsored by:
Server Products
Rhodenbaugh, Romer Honored By NAFEM
ASHFA/HFM Explore Possible Merge
FIA Looks At Industry Greening
ASTM Adds Lifecycle Costing Committee
Tim Hortons Now In Business At All Tops Stores
Camille’s Grows in Middle East Market

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In This Section:
Stimulus Bill Has $100 MM For School Foodservice Equipment
A Bloggish Scan Of Economic News Impacting Foodservice E&S

This issue's Regulatory ReportSponsor: Manitowoc Foodservice
Industry ReportSponsor: Server Products
Economic Report Food&HotelVietnam2009

By Robin Ashton

Stimulus Bill Has $100 MM For School Foodservice Equipment

The massive economic stimulus bill signed into law by President Obama in Denver last week, the $798-billion American Recovery and Reinvestment Plan, has a much-needed $100-million gift for school foodservice and the foodservice equipment and supplies industry.

According to a release from the School Nutrition Association, the monies shall be granted to the state authorities overseeing school foodservice. The release said the states “shall provide competitive grants to school food authorities based on the need for equipment assistance in participating schools with priority given to schools in which 50% of the students are eligible for free or reduced-price meals, under the Richard B. Russell National School Lunch Act. Funds would be made available through (the Federal) fiscal year 2010.”

SNA said members, including associate members from E&S manufacturers, sent nearly 5,000 e-mails to Congress urging the capital funds be included in the package. While we couldn’t confirm this as we went to press, we’ve heard this is the first Federal funding for foodservice equipment for the program since the 1970s.


Section sponsored by Food&HotelVietnam2009

A Bloggish Scan Of Economic News Impacting Foodservice E&S
Except for the $100-million stimulus for school foodservice equipment, it was mostly another week of negative economic numbers. Because a lot of fourth-quarter reports are now just coming in, we can depress ourselves with the past as well as the present, if we so choose.

Jobless claims rose again, according to a Department of Labor report released Thursday. More than five million Americans are now collecting unemployment insurance benefits….The Producer Price Index and the Consumer Price Index both were up slightly, showing that the greatly feared deflation of prices was slowing or stopping. The overall Producer Price Index for finished goods, reported Thursday, was up 0.8% thanks to a rise in energy costs. Foods at the finished producer level, where foodservice operations buy them, fell 0.4% in January. Deflation rates also fell at the intermediate and crude goods level. The Consumer Price Index, released Friday, also rose thanks to increased energy costs; overall it was up 0.3%. The CPI was virtually unchanged from January 2008 to January ’09. Who would have thought, given the midyear spikes? The food component rose 0.1% after falling in December. Food-away-from-home prices continued to rise, up 0.3%, the same rate for the past three months. Menu prices are up 4.9% since January ’08.…We’ve seen a couple new forecasts of the general economy the past couple weeks. The Federal Reserve Open Market Committee released its forecast of gross domestic product and other key economic indicators last Wednesday. The new forecasts, the first since October from the Fed, were significantly lower than those of three months ago. The consensus of the 16 Fed governors was for real GDP declines of 0.5% to 1.3% in ’09, with the strong declines of the first half offsetting the “gradual recovery” of the second half. The Fed’s forecast for ’10 GDP is 2.5% to 3.3% real growth, which would be close to the longer term “trend” of 3%. The more than 50 leading economic forecasting groups polled monthly by Blue Chip Economic Indicators are more pessimistic. Their latest consensus for ’09 GDP, released Feb. 10, is for a 1.9% real decline this year and a 2.1% real gain next year. These forecasts are down 0.3 point each from the January forecasts. The consensus for personal consumption expenditures also fell 0.3 point to -1.4%, still the worst consumer spending environment since World War II. The economists do expect both GDP and PCE to turn positive in real terms in third-quarter ’09…Public and a few private restaurants chains are reporting their fourth quarter ’08 numbers. We’ll analyze them in more depth in the next issue of FER Fortnightly, but in broadest terms, most casual-dining companies got hammered, fast-casual numbers were mixed and most quick-service concepts continued to report positive numbers, led as usual by McDonald’s. We’ll call out only one other specific chain. Same-store sales at Buffalo Wild Wings rose nearly 5% in the fourth quarter, and its profit rose 27% over ’07. Even in the worst of times, Americans have to eat something. Seems it’s burgers, biscuit sandwiches and wings.

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