Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
March 10, 2009

Regulatory Report:
Sponsored by:
Manitowoc Foodservice
In Tough Times, Charleston Loosens Rules
California Adopts Plan To Fight Global Warming
Toronto, Twin Cities Take On Trans Fat—Maybe
Dublin Operators Face FOG Fee
Oklahoma, Indiana Consider Teeth In Smoking Bills

Industry Report:
Sponsored by:
Hotelex Shanghai
FCSI Gets New Worldwide Digs
Cold Stone, Tim Hortons Plan More Co-Branding Tests
Carl's Jr. Debuts Eco-Friendly Prototype
NRA Names 2009 K. I. Award Recipients
Hotelex Shanghai 2009 Set To Go

FER QuickLinks Menu
Subscribe to FER
FER Buyer's Guide
FER Services Guide
FER Calendar

FER Media Kit

Advertise with FER, contact Robin Ashton

To subscribe to this newsletter, click:
Subscribe FER Fortnightly

To unsubscribe from this newsletter, click:
Unsubscribe FER Fortnightly

To view archived issues of Fortnightly, click here.

This e-mail was brought to you by the folks at:
Foodservice Equipment Reports
8001 N. Lincoln Ave.
Skokie, IL 60077
Fax: 847/673.8679

In This Section:
Restaurant Performance Index Up In January
Operator Traffic Falls In Q4, NPD Says
U.S. GDP Much Worse Than Expected In Q4

This issue's Regulatory ReportSponsor: Manitowoc Foodservice
Industry ReportSponsor: Hotelex Shanghai
Economic Report Food&HotelVietnam2009

By Robin Ashton

Restaurant Performance Index Up In January

We're not pretending the skies have actually brightened, but the Restaurant Performance Index ticked up a full point in January, according to the latest data from the National Restaurant Association. With all but two of the eight components that make up the Index moving higher, the measure rose to 97.4 in January, up from December's record low 96.4. Still, January marked the 15th consecutive month the Index has indicated contraction. A score of 100 marks the balancing point between expansion and contraction.

Both the Current Situation and Expectations Indices also moved higher. On the strength of a two-point gain in same-store sales and a 1.5-point gain in the traffic component, the Current Situation Index rose 0.8 point. The Expectations Index was up 1.2 points, as all four future components rose. But again, both Indices remained below the 100 tipping point.

The capital expenditure components were mixed. The cap-ex measure in the Current Situation Index, which charts purchases made during the past three months, remained flat, matching its record low from December. Only 34% of those surveyed reported making capital expenditures during January. In the Expectations Index, however, the measurement of operators anticipating capital expenditures in the next six months rose 0.8 point, up from its record low in December. Of those reporting, 41% said they plan to make a capital purchase, up from 37% in December.


Section sponsored by Food&HotelVietnam2009

Operator Traffic Falls In Q4, NPD Says
As the general U.S. economy in the fourth quarter was recording its worst performance in decades, most of the chain-restaurant industry was also experiencing its worst three months in a very long time, and possibly its worst ever.

Recently released data on commercial restaurant traffic from NPD Group, as reported in Nation's Restaurant News, show traffic fell 1% to 2% each month in three of the last four months of 2008, with traffic in October down nearly two points. Only November showed a traffic gain; in December traffic was off 1%. All figures are measured against same-period year earlier.

Same-store sales numbers for fourth-quarter '08 reported by many chains, especially those in the casual and fast-casual arenas, reflected the strong downturn. Fast-casual chains were mixed, lower-end casual chain operations were off, and high-end casual concepts—especially high-end steakhouses—were getting hammered. Most quick-service concepts were doing well.

Many if not most of the large quick-service chains continued to report same-store gains as consumers traded down. McDonald's, Burger King, Wendy's, Jack-in-the-Box and Yum!'s blended U.S. results all showed higher same-store sales for the fourth quarter and into January. Some pizza chains were up, some down. Beverage concepts, however, were mostly sharply lower.

Panera and Chipotle posted positive fourth-quarter numbers among fast-casuals, but several of their competitors were off 2% to 6%. Many lower-end bar and grill concepts and specialty concepts reported similar slides. An exception was Buffalo Wild Wings, which saw same-store comps rise 4.5% for company stores and 2.5% for franchised units in the quarter.

Section sponsored by Food&HotelVietnam2009

U.S. GDP Much Worse Than Expected In Q4
We'll keep this short, as most of of you read the papers or watch CNBC. Real gross domestic product fell a whopping 6.2% in the fourth quarter of 2008, not the 3.8%-drop originally estimated in the "advance" reading. All major sectors of the economy—consumer spending, business investment, housing and exports—were off, the latter three all by more than 20%. It was the worst quarterly shellacking the U.S. economy has seen since the worst of the 1982 recession.

And measurements of consumer confidence and sentiment—the former from the Conference Board, the latter from the University of Michigan—were down sharply in February. The Conference Board's Confidence Index hit a record low of 25, falling well below the previous low of 37.7 recorded in December. The University of Michigan's Sentiment Index fell to 56.2. It hit its lowest level since 1980 in November at 55.3, but was off five points from January. Both research groups' expectations indices also fell sharply, indicating consumers don't think things will get better soon.

© Copyright 1996-2009. Foodservice Equipment Reports. All rights reserved.