Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
March 13, 2007

Regulatory Report:
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California Produce Facing New Regs
Menu Fight Pits NYC Council Against Health Department
More Health Departments Put Inspections Online
B.C. Cracks Down On Underage Drinking
Foie Gras Police Cite First Offender In Chi-Town

Industry Report:
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Server Products
Vote Now For FER Dealer Awards
Middleby To Acquire Jade Products
Produce Safety Conference Scheduled In March
Hennessey Travelers' 50th Puts 50 Air Force Personnel In CIA
CFLs Get Big Push Here And Australia
Last Charity Ride To NAFEM Gearing Up

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In This Section:
Weather Clips January Traffic, Sales, NRA Study Shows
Traffic, Sales Rose In December, Reports NPD
Chain Unit Index Pops Back Up In February

This issue's Regulatory ReportSponsor: Enodis Industry ReportSponsor: Server Products
Economic Report The NAFEM Show 2007

Weather Clips January Traffic, Sales, NRA Study Shows
Extreme weather and tough comparisons with a strong 2006 drove restaurant sales, traffic and other indicators down dramatically in January, according to the latest data from the National Restaurant Association's monthly Restaurant Performance Index. But operators' expectations rose during the month.

The overall Index fell 1.1 point to 100.6, led by a 2.5-point drop in the Current Situations Index. All four components of the Current Situation Index fell, with same-store sales and traffic off 3.6 and 3.8 points respectively. The component tracking capital expenditures during the past three months was off least, down 0.5 point.

All four components of the Current Situation Index, as well as the Index itself, now stand below 100. Above that level signifies expansion; below signifies a contraction. It's the first time the Current Situation Index has dipped below 100 since the month following Hurricane Katrina in 2005.

Hudson Riehle, senior v.p. of research and information services at NRA, noted that weather and comparisons with last year's strong January accounted for the declining measurement. He said strong gains in the entire first quarter last year will likely restrain the Index during the next three months.

But while current conditions suffered, operator expectations improved. Three of the four components of the Expectations Index rose, and the fourth was flat. Expected capital expenditures rose 0.4 point. The overall Expectations Index stands at 102.2.


Section sponsored by The NAFEM Show 2007

Traffic, Sales Rose In December, Reports NPD
Quick service concepts continued to drive restaurant growth in late 2006, according to data from The NPD Group. Sales rose 4% overall in December compared with same-period '05, while traffic was up 3%. The announcement marks the first time NPD has publicly released monthly data from its CREST—Chain Restaurant Eating Share Trends—study.

As has been true throughout most of the past year, quick service concepts drove the gain. Traffic for QSR rose 4%, while traffic at casual dining and midscale concepts was flat. QSR recorded a 5% sales gain while the other two segments saw sales rise 3%. Chains also outperformed independents, with chains posting a 5% traffic surge while independents were flat.

Michele Schmal, foodservice v.p. for The NPD Group, said trends were somewhat higher in December than November, but that NPD does not expect that trend to hold for January. "January '07 is going up against a very strong January '06, when restaurant sales rose 7% and the country enjoyed its warmest January in 112 years," Schmal said

Section sponsored by The NAFEM Show 2007

Chain Unit Index Pops Back Up In February
Chain new unit activity rose in February, according to The organization, which maintains databases of chain activity, said its Restaurant Incubator Index rose 1.01 point to 1021.37 last month. The Index had fallen in both December and January.

The Index reflects the change in the total number of units in a "Restaurant Incubator" tracking group, which is designed to track the growth of small chains into larger groups.

Among chains showing strong growth in recent months were Pei Wei Asian Diner, Robek's Fruit Smoothies, Potbelly Sandwich and It's A Grind Coffee House.

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