Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
June 5, 2007

Regulatory Report:
Sponsored by:
Humor Police Come Down On Florida Pubs
County In Maryland Nixes Trans Fat; More Chains Switch
Illinois Legislature Says It's Time To Snuff Out Butts

Industry Report:
Sponsored by:
Server Products
Hatco Becomes 100% Employee-Owned
TriMark Acquires S.S. Kemp
Survey Says: Companies Benefit From Having CEO
Rivera Named National Restaurant Association Head
McD's, Marriott, Starbucks Among World's Most Ethical Companies

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In This Section:
SPECIAL FOCUS: Equipment, Supplies Market On Track For Moderate Growth
NRA Performance Index Falls Back In April Surveyr
May Jobs Growth, Consumer Sentiment Stronger Than Expected
Top 500 Chains Grew Sales 6% in 2006, Says New Technomic Study

This issue's Regulatory ReportSponsor: Enodis
Industry ReportSponsor: Server Products
Economic Report Manitowoc Foodservice Group

Equipment, Supplies Market On Track For Moderate Growth

Last issue (see FER Fortnightly, May 24), we reviewed first quarter 2007 data on the foodservice equipment and supplies market, operator sales, traffic and new unit trends, as well as macroeconomic factors that affect foodservice. This issue, in addition to reporting on some late-breaking information from the National Restaurant Association, the U.S Labor Department, the University of Michigan Surveys of Consumers and Technomic Inc., we analyze how the year is shaping up for those who sell and buy equipment and supplies.


Section sponsored by Manitowoc Foodservice Group

NRA Performance Index Falls Back In April Survey
Maybe those record high prices for gasoline are beginning to bite into foodservice sales after all. The National Restaurant Association's Restaurant Performance Index fell back in April, as operators reported slower same-store sales and traffic, and lower but still respectable capital expenditures and expectations for conditions during the next six months.

The overall Index lost 0.9 point, to 101, but remains above the 100-value tipping point for expansion versus contraction. The downturn follows a strong gain in March that reversed a three-month slide from December that was driven by tough winter weather and hard comparisons with a very mild 2006 winter. The March uptick was the strongest gain in the Index in 17 months.

The more volatile Current Situation Index fell 1.1 point to an even 100. The Expectations Index fell 0.7 point to101.9, driven by a 1.3-point drop in business condition expectations over the next six months. The capital expenditures component, which signals planned spending for E&S during the next six months, helped prop up the Expectations Index, as it fell only 0.1 point. Sixty-one percent of operators in the April survey reported they expect to make capital purchases, the same percentage as in March.

Section sponsored by Manitowoc Foodservice Group

May Jobs Growth, Consumer Sentiment Stronger Than Expected
Never underestimate the resilience of the American economy or the optimism of American consumers.

Despite record high gasoline prices, a pronounced downturn in housing and other negatives, the United States added 157,000 new jobs in May, according to data released by the Department of Labor.

At the same time, the Consumer Sentiment Index fielded by the University of Michigan's Surveys of Consumers moved higher in May as equity markets hit record highs, offsetting negative effects from the housing slump and high gasoline prices. The Index rose to 88.3 from 87.1 in April. Many economists had expected the gain to be a bit smaller. The Expectations and Current Situation indices also moved higher. The research group did note that lower income households complained more about high prices, "but their complaints were less frequent than last year when the price of gas was 34 cents (a gallon) lower." The University of Michigan data is reported exclusively by Reuters.

All the jobs growth, which outstripped economists' forecasts by nearly 30,000, was in service sectors, with particularly robust increases in hospitality. Jobs growth and rising consumer confidence usually lead to growth in household spending on foodservice.

Section sponsored by Manitowoc Foodservice Group

Top 500 Chains Grew Sales 6% in 2006, Says New Technomic Study
The big dogs just get bigger in multiunit foodservice. The largest 500 chains grew sales 6% in 2006, with sales for the 500 reaching $212.7 billion, according to Technomic Inc.'s annual study of the largest U.S. restaurant chains.

"As the U.S. economy continued to struggle against rising gasoline prices, aggressive chain restaurant unit expansion and menu price increases fueled the Top 500 to outperform the restaurant industry at large, which grew 5.9%," said Darren Tristano, managing director of Technomic Information Services.

In addition to rankings and growth analyses of sales and units, both in the U.S. and worldwide, the 2007 Technomic Top 500 Chain Restaurant Report provides Technomic's exclusive five-year sales forecast by menu category; an update on quick casual; 5-, 10- and 20-year trend analyses; an outlook for the future; market share by menu category and much more.

To order a copy, visit or contact Chris Urban at
312/876-0004, ext. 3929 (

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