In This Section:
Public-Company E&S Sales Continue To Improve
Forecasts For The U.S. Economy Improve Again
Employment Trends Turn Positive, Surprising Some Economists
Are McDonald's April U.S. Sales Gains Another Sign Of Recovery?
This issue's Regulatory Report Sponsor: Manitowoc Foodservice
Industry ReportSponsor: A.J. Antunes & Co.
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By Robin Ashton
Public-Company E&S Sales Continue To Improve
Thanks in part to easy comparisons, the revenue trends for the publicly traded foodservice equipment and supplies companies continued to improve in the first quarter 2010, according to data compiled by John Muldowney, principal of Clarity Marketing, Tipp City, Ohio.
Total blended sales for five equipment-oriented and two supplies-oriented companies fell 3.4% in the quarter, compared to the first quarter '09. This is an improvement over the fourth quarter last year, when overall sales fell 4.3%, and a far cry from the double-digit revenue drops the public companies suffered for four quarters beginning with the fourth quarter '08. Overall blended sales plunged 12.6% in the first quarter '09.
Blended sales for the five reporting equipment companies fell only 3.2% first quarter '10, versus a 5.5% drop in the fourth quarter '09. But the result would be even better, down a mere 0.4%, save for one company which saw sales fall more than 16%. This company booked a very large chain rollout in the first quarter '09, which makes it tough comparison.
The trend in supplies sales reversed to -4.3% after showing a 1% gain the fourth quarter '09. Both reporting supplies companies blamed the severe winter weather for cutting into operator sales volumes in January and February, and thus supplies and tabletop sales.
Even with the downturn in supplies sales and the big decline from that single equipment company, it begins to appear that the worst is over for many suppliers in the E&S market. The public companies' improved trend mirrors the less negative sales trend in the MAFSI Business Barometer for the first quarter '10. See that story at www.fermag.com/fortnightly/05.04.10/economic/home.htm#mafsi
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Section sponsored by Henny Penny
Forecasts For The U.S. Economy Improve Again
The views of an improving economy keep popping up everywhere. Buoyed by the improving employment picture (see story following) and a somewhat surprising rebound in overall consumer spending, the consensus forecasts compiled by Blue Chip Economic Indicators improved again in early May. The 50-plus leading economic forecasters polled by the newsletter boosted their consensus forecast for growth of real gross domestic product in the U.S. to 3.2% for 2010, and held to their forecast of 3.1% for next year.
The forecast for real growth in personal consumption expenditures this year jumped 0.3 point to 2.5%, even though the forecast for growth of real disposable income fell to only 1.3%. The forecast for real PCE growth next year also improved to 2.7%. The growth forecast for real DPI in '11 held steady at 2.6%.
As Blue Chip Executive Editor Randy Moore put it, the forecast improvements were "driven by a steady flow of generally upbeat economic data. Monthly indicators of employment, consumer spending, manufacturing, orders for capital goods, housing starts and home sales met or exceeded consensus expectations."
Section sponsored by Henny Penny
Employment Trends Turn Positive, Surprising Some Economists
A critical driver of clearly improving foodservice operator sales—and which is signaled by both recent same-store-sales reports for chains and indicators such as the National Restaurant Association's Restaurant Performance Index—is the jump in job creation by the U.S. economy and the improved outlook as the economy moves into summer.
The Department of Commerce Bureau of Labor Statistics reported May 7 that 290,000 new non-farm payroll jobs were created in April, with growth reported across nearly every category of employment, including the hard-hit manufacturing and construction industries. It was the largest monthly gain in nearly four years. The unemployment rate rose to 9.9% from 9.7% in March, but this was because more than 800,000 discouraged workers re-entered the job market.
What's more, the Bureau revised up the numbers for February, from -14,000 to +39,000, and raised the number for March to a gain of 230,000 from the first-reported rise of 162,000. Job growth has now been positive for five of the past six months since November 2009.
The sudden jump in jobs growth has taken many economists by surprise. Most had forecast a very gradual improvement or even further declines this spring with a slow increase in job creation through the rest of the year.
Section sponsored by Henny Penny
Are McDonald's April U.S. Sales Gains Another Sign Of Recovery?
McDonald's Corp. reported May 10 that same-store sales in the U.S. rose a respectable 3.8% in April, the chain's biggest one-month gain in the U.S. since last year. The gain was even more impressive in that U.S. same-store sales jumped 6.1% in April '09.
McDonald's so-called comparable sales went negative for the first time in more than six years in October 2009, and have bumped along, a little up, a little down, since. For example, U.S. comp sales rose 1.5% for the first quarter '10.
We note this in part because we date the month of the last recovery from a foodservice recession in July '03, the first month McDonald's U.S. same-store sales went positive after a couple years of weak results. It was from that date that McDonald's started its quite remarkable run of year-on-year monthly comp sales gains.
Worldwide, McDonald's saw comp sales rise 4.9% in April, with a 5.3% jump in Europe and a 3.9% gain in Asia/Pacific, Middle East and Africa
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