Foodservice Equipment Reports Fortnightly
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Welcome to FER Fortnightly Online Newsletter
August 17, 2004








Industry Report:
Sponsored by: Vollrath Co.

Some Chains Revising Construction Projections Downward
FCSI White Paper: No Subs Without Approval
ASFSA Becomes SNA
Aga Foodservice Acquires La Cornue
Harrah’s Acquires Caesars

Regulatory Report:
Sponsored by: ES3

Washington State’s New Food Code May Mean Capital Outlays
Connecticut Tightens Grip On Fat, Oil And Grease Disposal
New Overtime Regs Kick In Next Week
Yavapai County, Ariz., To Require More Than Lip Service
Maryland Restaurants Dodge Another Smoking Bullet



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In This Section:
MAFSI Barometers Show Healthy Second Quarter Sales Gains
Strong Second Quarter for Public E&S Companies
Blue Chip Economists Pare Back Forecasts
Chain International Growth Rebounded in 2003


This issue's Industry Report
Sponsor: Vollrath Co. |  Regulatory ReportSponsor: ES3


Economic ReportSponsored by Atlas Metal Industries Inc.

MAFSI Barometers Show Healthy Second Quarter Sales Gains
Overall sales were up nearly 3.0% in the second quarter this year compared to same-period 2003, according to the quarterly MAFSI Business Barometer compiled by Manufacturers’ Agents For The Food Service Industry. These results come on the heel of a 1.2% overall sales gain in the first quarter.

All five North American regions reported sales increases, with particularly strong gains in the Northeast and Midwest, two areas hard hit during the downturn. Overall sales were up 4.0% in the Northeast and 3.7% in the Midwest. Both regions reported strong gains in equipment and tabletop sales. Overall sales were up 4.4% in Canada, 1.8% in the South and 1.4% in the West.

Reps are also optimistic about the third quarter. The MAFSI Business Confidence Index projects an overall 2.8% gain for the current quarter with strong optimism again in the Northeast, Midwest and Canada.

The MAFSI Business Barometer is based on like-line sales reports from more than 125 rep firms through North America.



Section sponsored by Atlas Metal Industries Inc..

Strong Second Quarter for Public E&S Companies
Early reports of second-quarter 2004 results from major public equipment and supplies companies suggest strong gains, according to John Muldowney of Clarity Marketing. Several companies are reporting double-digit sales and profit gains compared to second quarter 2003.

With reports from seven of 11 companies typically tracked, blended sales rose 8.4% in the second quarter. Sales rose 8.3% in the first half of ’04, versus the similar period last year. Companies with a great percentage of sales from larger chains seem to be doing best, while some spec-oriented companies are reporting slower growth.

For the complete report, including individual company results, contact Muldowney at jmuldowney@claritymarketing.com.



Section sponsored by Atlas Metal Industries Inc.

Blue Chip Economists Pare Back Growth Forecasts,
But Federal Reserve Boosts Interest Rates Again
Surprisingly poor job growth, personal consumption expenditures and total GDP growth numbers are beginning to undermine the growth forecasts of leading economists polled for Blue Chip Economic Indicators. Still, while taking note of the surprising recent softness, the Federal Reserve Bank went through with its expected quarter-point increase, to 1.5%, in the overnight discount rate last week.

Surveyed just before the employment report was released Aug. 6, Blue Chip economists cut their consensus forecast of 2004 GDP growth to 4.4%, down 0.1 point from last month. This follows a 0.2-point drop last month. Forecasts for third quarter and fourth quarter growth also dropped 0.1 point each. The economists were responding to second quarter initial estimates of 3 % real GDP growth, much lower than expected. Personal consumption expenditures in the second quarter were only 1%, the worst performance in three years.

Still both the Blue Chip economists and the Fed bankers expect growth to pick up again in the third and fourth quarters. July retail sales, vehicle sales, and initial employment data suggest the economy bounced back in July.

The consensus forecast for 2005 GDP growth also dropped 0.1 point to 3.9%.



Section sponsored by Atlas Metal Industries Inc..

Chain International Growth Rebounded in 2003
Following several stagnant years, international growth of U.S. concepts picked up again last year, according to The 2004 Technomic Top 100 and Second 100 reports. In addition, strong economic growth forecast for the leading Asia-Pacific economies bodes well for continued chain growth.

Total sales, domestic and international, for the Top 100 increased a whopping 14.9% in ’03 versus growth of just 5.7% in ’02, aided in part by favorable currency exchange rates. Total international units grew 5.2%.

This compares with domestic-only sales gains of 5.6% and unit growth of 3.9% in domestic markets.

Among leading chains, Subway’s international sales soared 32% as it added 725 new restaurants. Starbuck’s sales rose 26.4%, and Domino’s grew 14.8%

International sales among the Second 100 rose 4.5% in ’03, compared with 5% domestic growth. Units grew 8.1%.

For the complete Top 100 and Second 100 reports, contact Technomic Information Services at foodinfo@technomic.com.




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