Foodservice Equipment Reports Fortnightly
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Welcome to FER Fortnightly Online Newsletter
October 9, 2007








Regulatory Report:
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Oct. 23?

North Carolina Changes Inspection Frequency
Locales Say You Can't Just Flush Water Down Toilet
L.A. Wants To Fight Fat With War On Fast Food
Better Sit Down, Have A Drink To Hear This

Industry Report:
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Cleveland Range Buys JC Pardo
CEC Adds Efficiency Certification Guide To Web
NYC 'Boot Camp' Teaches Restaurateurs How To Get Started
Company Uses Ex-Cops To Nab Grease Thieves



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In This Section:
Technomic Forecasts Operator Sales Growth To Slow Only Slightly
Outlook Improves For Stainless But Not Other Key Materials
Jump In Sales, Traffic Pushes NRA's August Index Higher

This issue's Regulatory ReportSponsor: Enodis
Industry ReportSponsor: FER E&S Market Forecast Meeting
Economic Report Manitowoc Foodservice Group

Technomic Forecasts Operator Sales Growth To Slow Only Slightly
The future's uncertain, but the end is hardly near for operators in 2008. True, Technomic Inc. predicts operators will face an uneasy consumer, dicey economy and rising costs for food, labor and energy. But people still have to eat, and operator sales next year are forecast to grow 1.1% in real terms, 5.1% with menu price increases factored in. This is only a slight slowdown from '07's forecast growth of 1.3% real and 5.3% nominal.

Technomic made the predictions during the annual multi-city series of Forecast & Outlook Seminars sponsored by the International Foodservice Manufacturers Association the week of Sept. 17, 2007.

Operators are most concerned about rising food and labor costs, according to Technomic. Many have raised prices aggressively and are expected to continue to do so. As a result, Technomic forecasts food-away-from-home inflation at 4% for both '07 and '08.

Growth of commercial restaurants will continue to outpace most, but not all, noncommercial segments. Looking more closely, limited service will again outgrow full-service operations, which have seen their traffic and same-store sales lag in relative terms. Limited service is predicted to grow 6.6% this year and 6% in '08. Full service looks to grow 5.2% in '07 and 4.8% next year.

Noncommercial segments outpacing the market include elementary and secondary schools, and colleges and universities, both groups with growth in the 6.0% to 6.4% range this year and next. Elder care is projected at close to 8% both years, and lodging will continue to grow at more than 6% a year.

For information on the extensive predictions and data included in the annual forecast, call IFMA at 312/540-4400 or e-mail ifma@ifmaworld.com.

 

Section sponsored by Manitowoc Foodservice Group

Outlook Improves For Stainless But Not Other Key Materials
Beleaguered consumers of high-nickel-content stainless steels are finally getting some relief from soaring prices, according to the latest quarterly price forecasts released by Purchasing magazine.

With street-averaged nickel prices plummeting from a high of $22.73 a pound in the second quarter of 2007 to $15.18 in the third, and with continued moderation in the forecast, stainless-steel prices have followed.

While the average transaction price per ton with surcharge remained at a record $5,670 in the third quarter, it is expected to fall more than $2,200 in the fourth quarter to $3,444 a ton. Prices next year are predicted to continue falling toward $2,750 a ton by fourth quarter '08. But that continues well above the $2,250 to $2,500 a ton seen during the first half of '06.

The cost picture of other key materials used in foodservice equipment and supplies is more mixed. Aluminum sheet costs per pound are forecast to fall about 13% in fourth quarter '07 but then decline only slightly through '08. Copper prices look poised to rise slightly in the fourth quarter then stabilize through next year.

The energy and plastics outlooks are for rising prices. Natural gas is expected to rise more than 10% in the fourth quarter and remain 10% to 15% higher than '07 levels. Prices for plastic resins, mostly made from natural gas, also are predicted to rise moderately next year.

Further information on Purchasing's transaction price forecasts and other data is available at www.purchasingdata.com.


Section sponsored by Manitowoc Foodservice Group

Jump In Sales, Traffic Pushes NRA's August Index Higher
Maybe people have decided to assuage their sorrows about the jobs and housing markets with bags of hamburgers, fries and shakes. The Restaurant Performance Index released monthly by the National Restaurant Association ticked upward in August, as surveyed operators reported significant gains in customer traffic and same-store sales.

The overall Index moved 0.2 point higher to 101.1, once again exceeding the 100 tipping point that signals expansion versus contraction. The Index has remained above 100 for 52 consecutives months.

The Current Situation Index jumped 0.7 point as same-store sales rose 1.3 points and traffic rose 1.4 points. The labor component was down slightly but the index value for operators indicating a capital purchase during the past three months also rose 0.2 point.

Operators are a bit less optimistic about the future. The Expectations Index fell 0.3 point, as expectations for same-store sales and business conditions both fell 0.8 point, while the index for expected capital expenditures rose 0.4 point. The labor component was flat.



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