Foodservice Equipment Reports Fortnightly
www.fermag.com

Welcome to FER Fortnightly Online Newsletter
August 26, 2008








Regulatory Report:
Sponsored by:
Enodis
California Markets Declare Water Restrictions
L.A. Passes Neighborhood Fast-Food Ban
More Towns Try To Cut Through FOG
Menu-Labeling Laws Pop Up Faster Than CRA Can File Suits

Industry Report:
Sponsored by:
Server Products
Middleby Acquires TurboChef
FER Names Industry Service Award Winners
McD's Pushes For 450 New Units In China By 2010
FER Picks Up Two Editorial Awards



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

To view archived issues of Fortnightly, click here.

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:
Need To Know The Future? FER Forecasts Are Available In Several Forms
Early 2Q Data: Public E&S Companies Show More Slowing
Commodities Price Outlooks Improve, Some
Blue Chip Lowers '08, '09 Forecasts Again

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

By Robin Ashton

Need To Know The Future? FER Forecasts Are Available In Several Forms

Last issue we gave you a brief preview of Foodservice Equipment Reports' equipment and supplies market forecast for 2009. But that was just a preview.

If you want the whole thing, you can have it—for an extremely reasonable, dare we say minimal, fee. For only $449, you can get the entire six-PowerPoint deck. The whole pack includes lots of hard numbers, julienned every which way, with forecasts and analysis of general economic, operator and materials-pricing trends, and the magazine's hard-number forecasts of nine separate E&S product categories. You'll also receive an overview of growth by the Top 150 equipment and supplies manufacturers from forecasting partner John Muldowney, principal at Clarity Marketing, Tipp City, Ohio, and data on E&S price increases from AutoQuotes Inc.

And one other possibility: FER Publisher Robin Ashton and Muldowney will present an updated version of the forecast through an online Webinar scheduled Oct. 28. This update will include revisions of the forecasts based on new data as well as freshened calculations of our market estimates using new benchmark data from the soon to be released "NAFEM Size & Shape of the Industry" market numbers.

Participants will receive all materials in print and CD. Past attendees of our forecast seminars or other meetings qualify for a discount. Attendees of the President's Preview meeting July 30 can attend for free. To order the forecast, or for information on participating in the forecast Webinar, please feel free to e-mail Robin Ashton at rashton@fermag.com or call the magazine's office at 800/986-9616.

 

Section sponsored by Manitowoc Foodservice Group

Early 2Q Data: Public E&S Companies Show More Slowing
The equipment and supplies market slowed in the second quarter, judging by results from six of the nine publicly traded equipment and supplies companies tracked by John Muldowney, principal at Clarity Marketing, Tipp City, Ohio.

Blended organic sales for the six, which include four equipment-oriented companies and two supplies firms, rose a mere 0.9%, compared with second quarter 2007. Given price increases of 3% to 4%, unit and real sales remained negative for the second consecutive quarter. Three major equipment companies have yet to report.

This is the second consecutive quarter of slow organic sales growth from the publics. Muldowney estimated growth for the nine companies was a mere 0.3% in the first quarter. All reported numbers are nominal.

Still, public companies continue to outperform the general market, as represented by the quarterly Business Barometer from the Manufacturers' Agents Association for the Foodservice Industry. Second-quarter sales were off 0.3%, MAFSI reported. This followed a decline of 1.2% in the first quarter.


 Section sponsored by
Manitowoc Foodservice Group

Commodities Price Outlooks Improve, Some
Some of the speculative fizz that has driven prices of many commodities to record levels is fizzling out. Prices for a wide range of commodities, from oil and gasoline to grains and metals, have moderated since the beginning of July.

But does this mean we've seen the worst of the commodities bubble? Not necessarily.

It's true some key products have seen dramatic price declines. A barrel of oil is trading under $120 as we write this, well off its record $147 in June. This has led to steep declines in the price of gasoline and diesel fuel as well. But prices are still dramatically higher than a year ago, and the downstream effects are still being felt. The average national price of a gallon of gasoline fell another seven cents in the week ended Aug. 18, according to the Federal Energy Information Administration. But that average, $3.74, remains $.955 above the average last year.

The Producer Price Index for finished good shot up 1.2% in July and stood 9.8% higher than a year ago, its strongest rate of increase since 1981. And while the price increases for both energy and foods moderated, increases for other finished goods accelerated.

Interestingly, the price of nickel, the culprit that drove stainless prices to record levels in the third quarter of 2007, reached its lowest level in two years in mid-August. The average price on the London Metals Exchange hovered near $8 a pound. That's down from more than $14 in March and more than $22 last year, according to Tom Stundza, executive editor at Purchasing magazine.

You would think lower nickel prices would send stainless steel prices lower. But despite slowing demand, Stundza reports, prices for most stainless grades have remained stubbornly high. The problem this time: ferrochrome, the other major alloy in many stainless grades. Ferrochrome prices have shot up from a range of $0.75 a pound in first-quarter '07 to more than $2 a pound this quarter. Purchasing forecasts prices could reach $2.50 in the fourth quarter.

Still, while many analysts see some continued "pass-through" of energy and commodities costs, many also believe the slowing world economy and moderating energy prices, as well as a strengthening dollar, are beginning to take some of the air out of the commodities balloon.


 Section sponsored by
Manitowoc Foodservice Group

Blue Chip Lowers '08, '09 Forecasts Again
There is still no joy in macroeconomic forecasting land. The consensus forecasts for such key indicators as gross domestic product, disposable personal income and personal consumption expenditures continued to fall in Blue Chip Economic Indicators' early August survey of more than 50 leading economic groups.

For example, the consensus now believes real growth of PCE for 2008 will be a mere 1.2%, down 0.4 point from the July forecast. And the group dropped its estimate for PCE growth in '09 to 1.0%. Real GDP growth is now forecast at 1.6% for this year and 1.5% next. Nearly 56% of those surveyed said the U.S. economy is in, or will enter, recession this year.



© Copyright 1996-2008. Foodservice Equipment Reports. All rights reserved.