Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
May 22, 2008

Regulatory Report:
Sponsored by:
FOG Crackdowns Spreading
Senate Bill Could End Credit Card Lawsuits
L.A., Other Cities Tell Taco Vendors To Keep On Truckin'
Michigan A Step Closer To Statewide Smoking Ban

Industry Report:
Sponsored by:
FER E&S Market Forecast Meeting
ITW, Manitowoc Back And Forth Over Enodis
Middleby Buys Giga Grandi, FriFri
There's Still Time To Get Into Hot Water
NRA Looking To Award Next 'Good Neighbor' Restaurants
NACUFS Names Best College C-Stores
Thinking Outside Bun Saves Taco Bell Water, Energy

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In This Section:
MAFSI Barometer Goes Negative As Public E&S Companies Report Gains
Retail, Foodservice Sales Better Than Expected In April
Blue Chip Economists Continue To Trim GDP, Spending Forecasts
Be In The Know: Register Now For FER's President's Preview Forecast Seminar

This issue's Regulatory ReportSponsor: Enodis
Industry ReportSponsor: FER E&S Market Forecast Meeting
Economic Report Manitowoc Foodservice Group

MAFSI Barometer Goes Negative As Public E&S Companies Report Gains
It ain't just the economy, folks, that's driving the slowdown in restaurant traffic, according to a new report from The NPD Group.

The disconnect between private and large public equipment-and-supplies companies that emerged last year continued into the first quarter of 2008.

The quarterly Business Barometer survey fielded by the Manufacturers' Agents Association for the Foodservice Industry fell into negative territory in the most recent report, with overall sales of like lines dropping 1.2% versus first-quarter '07. The measurement was the first negative number posted by the MAFSI Barometer since the third quarter of '03, when sales fell 1.1%.

The MAFSI survey showed all four U.S. sales regions posted overall declines. Only Canada posted an overall gain. The U.S. Northeast and West regions showed the greatest declines, of 1.7% and 1.5% respectively. Sales in the Midwest were off 1.4%, and those in the South were down 1.1%. Equipment sales were most affected, with a decline of 1.2%. Of the four product categories, only tabletop was positive at 0.5%.

The reps surveyed forecast that sales will remain negative in the second quarter, at -0.5%.

In contrast, meanwhile, first-quarter '08 results from a number of major public equipment companies, while not as strong as during the second half of '07, showed reasonable gains. Numbers from two supplies companies did reflect the market slowdown. Both equipment and supplies groups reported declines in the core U.S. foodservice business.

The public equipment companies posting gains appeared to have benefited from three market factors: 1) strong international sales; 2) relative strength in quick-service chain and spec markets; 3) acquisitions.

A number of the companies noted strong gains in both Europe and Asia, as well as growing business in Canada and Mexico.

Quarterly blended-sales figures for the public companies will be released by John Muldowney of Clarity Marketing, Tipp City, Ohio, as soon as all the regularly tracked companies have reported their results.


Section sponsored by Manitowoc Foodservice Group

Retail, Foodservice Sales Better Than Expected In April
For those of us looking for a sliver of good news, the U.S. Commerce Department reported better than anticipated retails sales in April for many sectors other than autos. Foodservice sales also showed improvement over earlier this year.

Largely because of weakness in auto sales, overall adjusted retail sales dropped 0.2% in April versus March. Excluding the auto segment, which fell 2.8%, the retail figure would have been up 0.5%, a couple tenths higher than many had expected. The Commerce Department also revised the March sales figure excluding autos up three-tenths of a percent to 0.4%.

After several slow-growth months, eating and drinking place sales posted an adjusted 0.9% gain in April. This follows a 0.3% gain in March and an overall 0.3% gain for the February through March period.

Section sponsored by Manitowoc Foodservice Group

Blue Chip Economists Continue To Trim GDP, Spending Forecasts
The more than 50 leading economists polled monthly by Blue Chip Economic Indicators trimmed their 2008 and '09 forecasts once again in the early May survey. Most significantly, the economists cut their forecast for growth and spending in the second half of '08 and all of '09.

The consensus forecast for real growth of gross domestic product in the third quarter of '08 fell to 1.7%, down 0.3 point. The fourth quarter forecast dropped 0.4 point to 1.5%. Given faster than expected growth of 0.6% in the first quarter, the overall annualized real GDP forecast remained at 1.4% for '08. The group did cut its annualized GDP forecast to 2% in '09, down 0.2 point. Its '09 forecast is now 0.7 point lower than at the beginning of the year.

Real personal consumption expenditures are forecast to seesaw during the next three quarters, with third-quarter spending getting a boost from the Federal stimulus package. But the economists still expect such spending in '08 to suffer its slowest real growth since 1991 at 1.5%. PCE real spending in '09 is expected to remain restrained at only 1.8%.

Section sponsored by Manitowoc Foodservice Group

Be In The Know: Register Now For FER's President's Preview Forecast Seminar
With the rapidly changing economic outlook, you can't afford to be unaware of developments in the foodservice equipment and supplies market. So get on the stick and register for Foodservice Equipment Reports' annual President's Preview E&S Market Forecast meeting. The 2009 forecast seminar is slated for the Eaglewood Resort and Spa in Itasca, Ill., on July 30. Sign up by June 20 and the early-bird seminar fee saves you $100.

The meeting features the magazine's hard-number forecasts for E&S market growth in '07 and '08, and includes a wealth of data on general economic activity, operator markets, materials and E&S price trends.

The meeting is a one-day event scheduled so most attendees can fly in and out the day of the meeting. A limited number of hotel rooms at Eaglewood is also available for July 29. Seminar fee is $845 before June 20, $945 after.

Information on registration and the hotel is available at or by calling Jessica Scurlock or Robin Ashton at 800/986-9616.

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