Foodservice Equipment Reports Fortnightly
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Welcome to FER Fortnightly Online Newsletter
September 9, 2008








Regulatory Report:
Sponsored by:
Enodis
Water Woes Spreading On Both Coasts
California Approves Menu Law, King County, Wash., Reg Kicks In
County Bans Golden Arches As Signage—For Now
Coffee Shops Need Grease Traps, City Says
L.A. Court Overturns Taco-Truck Ticketing

Industry Report:
Sponsored by:
The NAFEM Show '09
Hoshizaki To Buy Gram Commercial
NRA Plans Food-Safety Seminar In October
Flex Your Marketing Muscle With Efficiency Award
Wal-Mart Tests 'Meal Solutions' Market With New Concept
IFMA Seeks Silver Plate Nominees



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In This Section:
Sign Up Now For FER's 2009 E&S Market Forecast Webinar
Public E&S Companies Did Better In Second Quarter, Final Numbers Show
NRA Performance Index Holds, Cap-Ex Spending Falls
Confidence Rises, But Markets Gag On Jobs, Financial Woes

This issue's Regulatory ReportSponsor: Enodis
Industry ReportSponsor: The NAFEM Show '09
Economic Report Manitowoc Foodservice Group

By Robin Ashton

Sign Up Now For FER's 2009 E&S Market Forecast Webinar

Missed our sister publication Foodservice Equipment Report's equipment and supplies market-forecast meeting in July? Fret not, oh seeker of wisdom and profitability. You have two ways to get your hands on FER's informed look at the market for the rest of this year and next.

First, Publisher Robin Ashton and forecasting partner John Muldowney, principal at Clarity Marketing, Tipp City, Ohio, will present the forecast again through an online Webinar scheduled Oct. 28. In addition to getting a 90-min. overview, you'll also receive the entire six-PowerPoint forecast deck including detailed data, forecasts and analysis of general economic, operator and materials-pricing trends plus the magazine's hard-number forecasts of nine separate E&S product categories. Also included: an overview of growth of the Top 150 E&S manufacturers from Muldowney, and data on E&S price increases from AutoQuotes Inc.

The update Webinar will include revisions of FER's earlier forecasts based on new data as well as recalculations of market estimates using new benchmark data from the soon-to-be-released NAFEM Size & Shape of the Industry market numbers.

Webinar participants will receive all materials in print and CD. Past attendees of the magazine's forecast seminars or other meetings qualify for a discount. Attendees of the President's Preview meeting July 30 can attend for free. Cost of the Webinar is $399, or $349 if you sign up before Oct. 1.

Second, if you really need the forecast now, it's available for $449, and then you can come to the Webinar for free.

To order the forecast, or for information, e-mail Robin Ashton at rashton@fermag.com or call 800/986-9616.

 

Section sponsored by Manitowoc Foodservice Group

Public E&S Companies Did Better In Second Quarter, Final Numbers Show
Organic sales for the nine equipment and supplies public companies tracked by John Muldowney, principal at Clarity Marketing, Tipp City, Ohio, grew an estimated 2.9% in second-quarter 2008 over year-earlier figures, a bit better than preliminary results indicated. The final number was also slightly stronger than the 0.3% organic growth of the first quarter.

Consistent with patterns throughout the foodservice downturn during the past year, equipment companies again did better than supplies companies. Blended sales for the seven equipment-oriented publics rose 3.8% in the quarter, while the two supplies-centric firms saw sales fall, slightly, by 0.7%.

The equipment companies continue to be buoyed in part by strong export sales, the persisting momentum of spec markets, and the continued growth of major quick-service chains. The supplies companies have been more impacted by the strong downturn in full-service restaurant sales.

When adding acquisitions to organic growth, companies on both sides of the E&S divide showed much stronger growth. The seven equipment companies grew sales 11% for both the second quarter and the half, while the two supplies companies saw an 11% gain for the quarter and 8% rise for the half.

Once again, the publics outperformed 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, following a decline of 1.2% in the first quarter.


 Section sponsored by
Manitowoc Foodservice Group

NRA Performance Index Holds, Cap-Ex Spending Falls
Steady as she goes—at depressed levels—was the news from the National Restaurant Association's July Restaurant Performance Index. The overall index remained at 98.3. July was the eighth consecutive month the index remained below 100, the tipping point between expansion and contraction.

While there were hopeful signs in some of the eight indicators, particularly in the measure that gauges the outlook for business conditions six months out, the two indicators of capital spending activity both moved lower. The indicator reflecting operators making a capital expenditure in the past six months fell a strong 1.3 point, the marker's first decline since March. The indicator for those planning capital expenditures during the next six months fell 0.9 point.

The four-component Current Situation Index was off 0.2 point, despite middling gains in the same-store sales and traffic numbers. The Expectations Index, which also has four components, rose 0.3 point. In addition to the 2.1-point rise in the business conditions outlook, expectations for same-store sales also rose.


 Section sponsored by
Manitowoc Foodservice Group

Confidence Rises, But Markets Gag On Jobs, Financial Woes
The two most widely followed measures of consumer confidence rose from near record lows in August, but that doesn't mean those fielding the research believe we've hit bottom. Meanwhile, a jobs report one economist called "grim" helped push financial markets lower late last week.

The Reuters/University of Michigan Index of Consumer Sentiment rose to 63 in the final August reading, up from 61.2 in July. The Consumer Confidence Index maintained by The Conference Board, which tends to be slightly more volatile, rose to 56.9 from 51.9 in July. Both groups' expectation indices also showed gains.

But Richard Curtain, director of the Michigan surveys, said the gain may be misleading and could be just a pause before another drop in confidence.

"Despite the decline in gas prices, consumers have remained quite negative about their personal financial prospects and expressed the weakest buying plans recorded in thirty years," Curtin noted. He added that the data still indicate the pace of growth in consumer spending will fall back toward zero in the fourth quarter of 2008 and first quarter of '09.

Meanwhile, U.S. non-farm payrolls fell by a more-than-expected 84,000 in August, the Labor Department reported last Friday. Unemployment rose a surprising 0.4 point to 6.1%, the highest level in nearly five years. The department also raised estimates of job losses in June and July. It is the eighth month of job retrenchment.

These numbers, along with fears several hedge funds may liquidate, spooked the financial markets again last week. Most major indices fell more than 3% on Thursday alone.



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