Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
October 7, 2008

Regulatory Report:
Sponsored by:
California Labeling Law Signed, U.S. Senators 'LEAN' Toward National Standard
Menu Calorie Listing Spreads Beyond NYC
Another California Town Tackles Expanded Poly Foam
Restaurants Lose Fight Against S.F. Health Plan
Milwaukie Passes FOG Law But Gives Coffee Shops A Break

Industry Report:
Sponsored by:
Hotelex Shanghai
Wendy's, Triarc Say What's Old(er) Is New Again
Starbucks' About-Face Good News For Oven Makers
Gill Wins FEDA's Anoff Award
MAFSI Names 2008 Officers, Award Winners

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In This Section:
How Will Financial Crisis Affect Foodservice World? Find Out At FER Forecast Webinar
Commodities Prices Moderating, But Not For Us
NRA Performance Index Remains In Negative Territory
Jobs Decline Again, Consumer Confidence Remains Weak

This issue's Regulatory ReportSponsor: Enodis
Industry ReportSponsor: Hotelex Shanghai
Economic Report Manitowoc Foodservice Group

By Robin Ashton

How Will Financial Crisis Affect Foodservice World?
Find Out At FER Forecast Webinar
Things are changing quickly in the economy. You need the most up-to-date insight into how the financial crisis will affect the market for equipment and supplies the rest of this year and next.

And there's no better place to get that insight than Fodservice Equipment Reports' revised E&S forecast. Publisher Robin Ashton and forecasting partner John Muldowney, principal at Clarity Marketing, Tipp City, Ohio, will present the forecast through an online Webinar Oct. 28.

In addition to getting an hour-and-a-half overview of the forecast, participants will receive the entire six-PowerPoint deck and be able to ask questions The forecast package includes 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. You'll also receive Clarity's overview of growth among the Top 150 E&S manufacturers, as well as data on E&S price increases from AutoQuotes Inc.

The presentation will include revisions of FER's earlier forecasts, incorporating the latest economic data as well as recalculations of market estimates using new benchmark data from the just-released NAFEM Size & Shape of the Industry market numbers. Participants will receive all materials via e-mail.

Fees? Past attendees of FER forecast seminars or other meetings qualify for a discount. Attendees of the President's Preview meeting July 30 can attend for free.

For those who don't qualify for the prior-attendance discount, and who missed the early-bird break, the registration fee is $399.

In the meantime, if you really need the forecast now, you can purchase it for $449, and you can come to the webinar for free.

To order the forecast, or for more information, e-mail Robin Ashton at or call the magazine's office at 800/986-9616.


Section sponsored by Manitowoc Foodservice Group

Commodities Prices Moderating, But Not For Us
Purchasing magazine's market basket of 109 commodities deflated by 2% in the third quarter. That's the good news.

Unfortunately, the news wasn't as good for commodities impacting foodservice equipment and supplies. Other than stainless steel, whose price dipped 5% for the quarter, most other material in E&S saw price increases. And while the worldwide economic slowdown is expected to put continuing downward pressure on prices, the declines are expected to be only moderate.

Prices for all the major steel products, other than stainless, have been rising all year and were higher again in the quarter. Cold-rolled sheet transaction prices rose 6%, those for electro-galvanized were up 6.2%. Purchasing forecasts a slight decline in the fourth quarter for some of the steels—stainless again, hot-rolled, cold-rolled and hot-dipped—but not all. Prices for nearly all the grades except stainless are 50% to 80% higher than a year ago.

Aluminum prices also rose 5% in the third quarter and have remained stubbornly high. They are not forecast to decline anytime soon. The price of copper has see-sawed all year but averaged an historically high $4.31 a pound in the third quarter. Overall, nonferrous metals are expected to be 2% higher for the year.

Plastics prices soared in the quarter as they were pushed higher by both petroleum and natural-gas hikes. Prices for extrusion-grade low-density polyethylene jumped almost 12% for the quarter. And the magazine forecasts prices will remain high for the coming year.

With economies softening worldwide, you may ask why commodity prices aren't moderating more quickly. As Tom Stundza, executive editor at Purchasing explains, "Despite fears of recession and sharp swings in oil prices and financial markets, the global economy will grow 3% in 2008 and 2.8% in 2009. [That's] below the 3.8% average over the last four years, but it's enough to maintain demand for commodities."

 Section sponsored by
Manitowoc Foodservice Group

NRA Performance Index Remains In Negative Territory
Things didn't get any worse for operators in August, according to the latest Restaurant Performance Index fielded by the National Restaurant Association. They just didn't get much better. The overall index rose a mere 0.1 point to 98.3, still within a range it's maintained all summer. And the number is well below the 100 index value that represents the tipping point between expansion and contraction.

The Current Situation Index was up 0.2 point; the Expectations Index down 0.1 point. Same-store sales and traffic improved a bit. Both indicators rose 0.3 point during the month. But once again, more operators reported declining sales and traffic than those who reported improvements.

Both capital-expenditure measures—for purchases made during the past three months and those anticipated during the next six—moved lower, by 0.3 and 0.2 point respectively.

And operators remain less than optimistic about the future. The indicator for future business conditions fell 0.2 point after improving last month.

 Section sponsored by
Manitowoc Foodservice Group

Jobs Decline Again, Consumer Confidence Remains Weak
Non-farm payroll jobs fell by 159,000 in September, according to the U.S. Department of Labor, a bigger decline than most analysts had expected. It was the largest single-month drop since March 2003, and the tenth straight month of net job losses. Unemployment held steady at 6.1%

Declines affected nearly every employment sector. Perhaps most worrisome, the service sector, traditionally one of the strongest employment areas in the U.S. economy, shed 82,000 jobs. Leisure and hospitality lost 17,000 jobs.

Meanwhile, the two major measures of consumer confidence showed gains in September, though officials at both survey organizations cautioned that the current financial crisis has not been fully digested by consumers.

The Conference Board's Consumer Confidence Index rose to 59.8 in September, up from 58.5 in August. The Consumer Sentiment Index rose to 70.3 from the 63 reading in August. But tellingly, the number fell from 73.1 in the mid-month preliminary reading.

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