Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
August 3, 2004

Industry Report:
Sponsored by: Hatco Corp.

Restaurant Lobby Kiosks Make Mail-Order Easy
Frisch's To Open 21 Golden Corrals
IHOP And Paradise Ink Deal For Up To 40 New Locations
Panera Rising

Regulatory Report:
Sponsored by: ES3

New ADA Guidelines Finally Released
Ohio Restricts POS Printout Data
NSF/ANSI 18 Changes Announced
U.K.’s "Chip and PIN" Program To Shift Fraud Liability
China’s New Franchise Rules Expected By Yearend…Probably

FER QuickLinks Menu
Subscribe to FER
FER Buyer's Guide
FER Services Guide
FER Calendar/

FER Media Kit

Advertise with FER, contact Robin Ashton

To subscribe to this newsletter, click:
Subscribe FER Fortnightly

To unsubscribe from this newsletter, click:
Unsubscribe FER Fortnightly

This e-mail was brought to you by the folks at:
Foodservice Equipment Reports
8001 N. Lincoln Ave.
Skokie, IL 60077
Fax: 847/673.8679

In This Section:
Dealer Sales Good, Margins Only Fair, FEDA Reports
Big Chain Sales Numbers Hold Up Through July
NRA Reports June Sales and Traffic Up, But Expectations Edge Downward
Consumer Sentiment, Expectations Improve In July Survey
Big QSRs Win By Luring Adults

This issue's Industry Report
Sponsor: Hatco Corp. |  Regulatory ReportSponsor: ES3

Economic ReportSponsored by Atlas Metal Industries Inc.

Dealer Sales Good, Margins Only Fair, FEDA Reports
The quandary faced by many dealers is apparent in a new economic survey released last week by the Foodservice Equipment Distributors Association. While 40% of the 83 firms reporting said business was "very good" or "excellent," and another 45% characterized business as "good," a full 60% said margins were "fair" or "bad." The survey was conducted online during June and July.

The results are a marked improvement compared with a similar survey conducted a year ago: In 2003, 42% of those surveyed then described sales as "fair" or "bad" versus just 15% in the current study. And 72% of the ’03 sample reported margins "fair" or "bad."

Dealers remain optimistic about sales three months from now, with more than 80% of the sample expecting good-to-excellent sales. And they’re slightly less pessimistic about margins three months from now: just half expect margins will be "fair" or "bad."

Forty per cent of those surveyed indicated inventory levels were up; a third said average days receivables were also higher.

Section sponsored by Atlas Metal Industries Inc..

Big Chain Sales Numbers Hold Up Through July
Same-store sales at larger quick-service and midscale restaurant chains continued to grow through late June and July, according to data from NPD Foodworld’s SalesTrac study. The study tracks the weekly performance of more than 50 QSR and MSR concepts.

Gains for QSR chains have averaged in the 4% to 5%, according to NPD Foodworld V.P. Michele Schmal.

Midscale chains experienced some soft weeks in late June and early July "but have been positive most recently," she said..

Many casual dining chains also reported good same-store comparables through June and July, including Applebee’s and Ruby Tuesday. Starbucks reported double-digit gains for its most recent four-week period.

Section sponsored by Atlas Metal Industries Inc.

NRA Reports June Sales and Traffic Improvements, But Expectations Begin To Edge Downward
Business remains good for most operators, according to the latest Restaurant Performance Index from the National Restaurant Association. But the overall Index for June registered 103.5, a slight half-point decline as those surveyed expressed a bit less optimism about future conditions.

Same-store sales and customer traffic showed gains in the survey’s Current Situation Index. The Capital Expenditures component, representing purchases during the past three months, was flat.

But all four of the components of the Expectations Index were negative, including a 0.9-point decline in capital-purchase intentions. The overall Expectations Index declined by a full point, to 102. (For all measures, 100 equals baseline readings in June 2002.)

The RPI is not yet seasonally adjusted, having been launched mid-year ’02, and the slightly diminished expectations may signal normal season anticipations.

Section sponsored by Atlas Metal Industries Inc..

Consumer Sentiment, Expectations Improve In July Survey
Improved job prospects recently fueled slight gains in the widely watched Consumer Sentiment and Consumer Expectations Indices compiled by the University of Michigan.

"The July survey indicated that consumers expected the economy to produce new jobs at a robust pace during the year ahead," said Richard Curtin, director of the university’s Survey of Consumers. Consumer confidence (Michigan calls it "sentiment" to distinguish it from the Conference Board’s competing Index of Consumer Confidence) has been running at its highest levels in four years, Curtin noted.

The Sentiment Index was 96.7 in the July survey, compared with 95.6 in June and 90.9 in the year-earlier period. The Expectations Index, a component of the Federal government’s Index of Leading Economic Indicators, rose to 91.2 in July, up from 88.5 in June and 83.7 a year earlier.

Section sponsored by Atlas Metal Industries Inc..

Big QSRs Win By Luring Adults
Major quick-service restaurant chains of late have been working hard to attract adults with salads, bottled water and other so-called "adult-oriented" products. Data on menu-item servings and relative traffic growth from NPD Foodworld show that thrust is paying off big time.

Traffic at hamburger-category restaurants surged 6% in NPD’s second quarter, March-May, versus the year earlier period. The burger group has led the operator recovery since the summer of 2003, as McDonald’s, Wendy’s, Burger King, the CKE concepts and others have expanded premium salad and sandwich offerings, bottled water and other items designed to attract adults. Because hamburger concepts account for 23% of all restaurant traffic, more than twice any other single category, a big chunk of total industry traffic gains can be attributed to these changes.

Traffic of adult-only parties grew 5% in the second quarter, while traffic of parties with children dropped a point. Adult parties account for 61% of all traffic. Servings of diet soft drinks and main-dish salads surged 15% versus the year-earlier period. Bottled water servings were up 16%. Of course, once customers are in a hamburger restaurant, other items attract. Servings of French fries grew 4% during the quarter, reversing recent slides.

© Copyright 1996-2004. Foodservice Equipment Reports. All rights reserved.