Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
August 28, 2007

Regulatory Report:
Sponsored by:
ASHRAE, DOE Partner For Greener Buildings
Steak 'n Shake, Starwood, Arby's, Even Canada Get Phat Going Trans Fat-Free
FTC Subpoenas Food Company Marketing Records
St. Louis, Sarasota Go To Dogs

Industry Report:
Sponsored by:
Server Products
Darden Makes `Rare' Offer To Buy Steakhouse Chain
Hungry For Dinner, Pancake House Becomes 'IHOPplebee's'
NAFEM Offers Free Consulting Services During Show
IFMA Wants Nominations For Silver Plate, New Awards
Political Duo Carville and Matalin Cued For IH/M&RS Workshop Keynote

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In This Section:
First E&S Public Company Numbers Show Strong 2Q Gains Smaller Chains' Unit Growth Stays Positive
Okay, So There's Some Tough Economic News. What About Factors Driving Foodservice?
Service Costs To Be Explored At FER's 2008 E&S Market Forecast Focus On Channels Meeting In October

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

First E&S Public Company Numbers Show Strong 2Q Gains
The overall market for foodservice equipment and supplies may be slowing a bit, but the large E&S public companies are doing quite well, thank you. Led by huge gains from two players, the first five equipment-oriented publics to report second quarter 2007 results posted a 14.7% sales gain over the same quarter last year. Two supplies companies reported blended increases of 6.9%.

All seven had sales gains exceeding 6%, even though one major was affected by a strike. Three of the five equipment companies posted double-digit gains for the quarter.

The second quarter spikes continue a strong trend seen in the first quarter. Sales for the first half of '07 rose 11.7% for the five equipment companies and 5% for the two supplies companies.

The strong gains contrast with very moderate growth of 2.8% for reps in the United States and Canada, as charted by the Manufacturers' Agents Association for the Foodservice Industry's MAFSI Business Barometer (see FER Fortnightly, Aug. 14, at


Section sponsored by Manitowoc Foodservice Group Smaller Chains' Unit Growth Stays Positive
The monthly Restaurant Incubator Index maintained by rose strongly again in July, the third straight month the Index has risen.

Led by aggressive unit growth of such chains as Five Guys Burgers and Pei Wei Asian Diner, the Index moved up 1.5 points to 1026.92. The Index reflects the change in the total number of units for the Incubator tracking group. The 3,274 chains analyzed have a least three units and fewer than 200. Total current units in the base are 63,567. Chains are contacted every four months.

For information on the Index and other products, go to

Section sponsored by Manitowoc Foodservice Group

Okay, So There's Some Tough Economic News.
What About Factors Driving Foodservice?

Yes, we know the credit and equities markets are going through some turmoil. But what about the macro economic factors that drive foodservice operator sales, and ultimately equipment and supplies sales?

It's probably not time to panic.

On the negative side, all the bad news on credit, mortgages and equity markets, not to mention the Federal Reserve saying the problems are reducing the outlook for growth, is having a negative impact on consumer confidence.
The mid-month preliminary reading from the University of Michigan Surveys of Consumers, released Aug. 17, had Consumer Sentiment down steeply from the end of July, dropping to 83.3 from 90.4. The Expectations Index also dropped in mid-month, to 74.1 from 81.5.

The ABC News/Washington Post Consumer Comfort Index had a record 9-point drop, to -20 (The scales runs from +100 to -100), in the week ending Aug. 20. The organizations said the changes were broadly based against all households and resulted from a "confluence" of factors, including the hangover from high gasoline prices.

Speaking of gasoline prices, they've been trending lower, as refiners approach the end of the summer driving season and as crude oil price have fallen below $70 a barrel.

And retail sales for July came in stronger than most analysts had predicted. Core sales gains, excluding gasoline and food, rose 0.6%. Foodservice sales rose a surprising 8% from year-earlier levels, when sales were highly affected by high gasoline prices. Revised figures had foodservice sales up 6.8% for June over the year-earlier level.

So while the current credit turmoil is worrisome, it doesn't seem the sky is falling on foodservice.

Section sponsored by Manitowoc Foodservice Group

Service Costs To Be Explored At FER's 2008 E&S Market Forecast Focus On Channels Meeting In October
The cost of after-sales service will be explored by a panel of servicers and operators as part of Foodservice Equipment Reports' 2008 E&S Market Forecast Focus on Channels. The meeting, tailored for dealers, consultants, reps, service agents and manufacturers, will be held Oct. 25 at the Embassy Suites O'Hare near Chicago.

Among key features of the event: FER's exclusive, hard-number forecasts of E&S market growth for 2007 and '08, analysis of general economic and operator metrics and trends, materials price forecasts and exclusive data on equipment and supplies price changes from AutoQuotes. The meeting will also include a second panel of representatives of the various channels discussing factors affecting their businesses.

Further information on the Focus on Channels program, costs and registration forms are available at or by calling Chris Palmer at 847/336-2049 or e-mailing her at

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