Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
May 3, 2005

Regulatory Report:
Sponsored by: APW Wyott Innovations

Groups Pitch Fed Standard For Commercial Refrigeration
Sprinkler Reg Reigns On N.H. Bars, Nightclubs
Where There’s Smoke, There’s Ire—Or Not
San Mateo Mulls Posting Of Inspection Results

Industry Report:
Sponsored by: Customer Choice Dealer Awards

Pre-NRA Friday = FER Awards + Party
NSC Forms Industry Exchange Group
NAFEM Releases New CFSP Study Guide
‘Down Under’ Merger Joins Curtin And OBS
Rankin-Delux Mourns Dick Jones
7-Eleven Coming To A Spot Near You
Fetco Brews In New HQ

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In This Section:
NRA Restaurant Performance Index Remains Positive
Gas-Price Bite Pushes Consumer Confidence Lower
First Quarter GDP Growth Comes In Lower Than Expected, But…

This issue's Regulatory ReportSponsor: APW Wyott Innovations Industry ReportSponsor: Customer Choice Dealer Awards

Industry Report Sponsored by Hatco Corp.

NRA Restaurant Performance Index Remains Positive
While traffic flattened, same-store sales for restaurants continued to grow in March, according to the latest Restaurant Performance Index released by the National Restaurant Association on Friday. Overall, the Index, comprised of eight measures probing current and expected conditions, stayed steady at 102.1. A value above 100 indicates the industry is expanding.

Three of the four indicators in the Current Situation Index—all but the flat traffic—were positive in March. These included capital expenditures, a read of purchases during the past three months. Combined, the Current Situation Index rose 0.3 point.

The Expectations Index was off 0.4 point, as three of the four components dropped slightly. Operators’ intention to make capital expenditures during the next six months fell 0.2 point, but at 102.4 was still in positive territory.

The March survey belies concerns that stubbornly high gasoline prices are biting into restaurant industry sales. Other measures of current sales have also remained positive.


Section sponsored by Hatco Corp.

Gas-Price Bite Pushes Consumer Confidence Lower
While higher gas prices do not appear to be dramatically affecting restaurant sales, they are having a negative impact on consumer confidence and expectations. The widely followed Indexes of Consumer Sentiment and Expectations fielded by the University of Michigan fell in April for the fourth consecutive month, it was reported last Friday.

The decline mirrors drops in other confidence measures, including the Conference Board’s and weekly polls done by ABC News/The Washington Post.

The Sentiment Index dropped to 87.7 from March’s 92.6, reaching its lowest level since September 2003. The Expectations Index fell to 77.0 from 82.8. It stood more than 10 points higher a year ago April. Surveys Director Richard Curtin cited "heightened concerns about rising inflation, higher interest rates and slower job growth. While the buzz was about gas prices, especially among lower-income households, all consumers have become more concerned about their future job and income prospects." Curtin said consumers are expecting economic growth to slow and without a quick reversal of the declines in confidence, the numbers suggest slower growth in consumer spending than recently forecast.

Section sponsored by Hatco Corp.

First Quarter GDP Growth Comes In Lower Than Expected, But…
Reported measures of the U.S. macro economy were mixed last week. The most important indicator, real growth in gross domestic product, came in substantially lower in the first quarter of 2005 than expected by most economists. The U.S. Department of Commerce reported last Thursday that the first estimate of GDP growth for the quarter is 3.1%. In the April 10 issue of <i>Blue Chip Economic Indicators<i>, the consensus of leading economists forecast growth of 3.9% in the quarter.

In another negative, durable goods orders were off 2.8% in March, the third straight month of declines in this highly volatile measure.

But then at week’s end, the Commerce Department also reported that consumer spending and incomes rose more than expected in March. The gains mirrored a higher than expected growth in personal consumption expenditures that was reported as part of the GDP announcement.

The continued relative strength in consumer spending may explain why restaurant sales have not yet been affected by all the economic nervousness.

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