Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
November 3, 2009

Regulatory Report:
Sponsored by:
Manitowoc Foodservice
ICC Gas-Code Change Extends Permit Time
Smaller Disposer Drains Okay Under Code Change
Colorado Cuts Minimum Wage

Industry Report:
Sponsored by:
Server Products
Pizza Hut Heats Up In U.K.
CR&HG Buys 10-Unit Millie's Chain
NRA's Web Site Offers Info On H1N1
NRA Offers Early-Bird Pricing For May Show

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In This Section:
FER's E&S Forecast Webinar Reslated To Nov. 18
NPD Reports Restaurant Traffic Fell 3.6% During Summer
NRA's September Performance Index Moves Lower Again
Technomic: Bleeding At Full-Service Ops Slowed In September

This issue's Regulatory ReportSponsor: Manitowoc Foodservice
Industry ReportSponsor: Server Products
Economic Report Integrated Control Corp.

By Robin Ashton

FER's E&S Forecast Webinar Reslated To Nov. 18

Foodservice Equipment Reports has postponed its annual Equipment and Supplies Market Forecast Webinar to Tues., Nov. 18. FER Publisher Robin Ashton, scheduled to host the event, was forced to reschedule due to unavoidable personal obligations.

Ashton and forecasting partner John Muldowney, of Clarity Marketing, Tipp City, Ohio, will present the completely revised forecast via a Web-based seminar, to begin at 1 p.m. Central Daylight Savings Time. To attend, you must register by Nov. 14.

The presentation will run about an hour and 15 minutes and will provide an overview of general economic, operator and materials pricing trends, historical E&S pricing trends from AutoQuotes Inc., and the magazine's hard number forecasts of nine separate E&S product categories for both '09 and '10, as well as overall industry forecasts for '11 through '13.

In addition to the Webinar's Executive Summary presentation, all participants will receive an updated version of the entire six-section forecast in easy-to-share PowerPoint format, including an overview of the Top 150 E&S Manufacturers from Muldowney.

The seminar fee is $349. Those who have attended the FER forecast or other FER meetings, or have purchased the forecast in the past, will receive a $50 discount. Those who attended the forecast seminar in August this year can attend the seminar and receive the updates for no charge.

But all must register, so we can send you details on how to participate. For information, e-mail Robin Ashton at or Chris Palmer at, or call 800/986-9616. A registration form for the event is available on our Web site at


Section sponsored by Integrated Control Corp.

NPD Reports Restaurant Traffic Fell 3.6% During Summer
The decline of restaurant-industry traffic that began in September 2008 continued for the fourth consecutive quarter in the June through August period this year, NPD Group reported last week.

And the declines steepened. Traffic fell 3.6% this summer compared to same-period '08, according to the research group's CREST consumer data. That decline follows a traffic drop of 2.6% second quarter, 1.5% in the December through February '09 period and 0.8% last fall. With a 2% gain in average check during the latest reported period, total consumer spending at restaurants fell 1.6%, NPD said.

All major segments, including quick-service restaurants, saw falling customer counts. QSR traffic was off 3%, casual-dining counts were off 4%, and midscale restaurants lost 5% of their customers versus the year prior. Among the day parts, only afternoon snack saw rising customer counts, up 1%. Supper day-part visits were off a whopping 6%.

NPD V.P. Harry Balzer attributed the traffic declines not just to high unemployment, but also to the diverging price trends for food at home versus food away from home. "Food prices at supermarkets are less than a year ago, while restaurant prices are higher," he said.

In response to declining traffic, many restaurants, especially casual-dining concepts, have been discounting aggressively. Deal-related visits increased 2% over the summer, on top of a 9% increase in deal-related visits during summer '08. Non-deal visits this summer fell 5%.

Certain noncommercial segments also are seeing traffic declines. NPD's CREST OnSite data, which track visits to major noncommercial segment operators, show big declines in traffic in the business and industry, vending and lodging segments. Visits at B&I foodservice operations fell a staggering 12% as job layoffs took their toll. But three segments recorded increased traffic: colleges and universities (4%), senior care and military (both 1%).

Information about The NPD Group and NPD research products can be found at

Section sponsored by Integrated Control Corp.

NRA's September Performance Index Moves Lower Again
Confidence is a funny thing, as much a matter of emotion as reason. A good example is the National Restaurant Association's September Restaurant Performance Index. The indices for current same-store sales and customer traffic actually improved a bit from August levels and helped the four-component Current Situation Index remain flat. But operators' faith that things will get better over the coming six months dimmed, dragging the Expectations Index down nearly a full point and the overall RPI Index down 0.4 point to 97.5.

It was the second consecutive month the Index has fallen and the 23rd month the Index has been below 100, the dividing line between contraction and expansion. In other words, the recession for restaurant operators is now nearly two years old and looks as if it will last a while longer. In fact, the RPI stood 1.1 point lower in September than it did in April, when operators thought things would improve a bit more quickly.

Expectations for improved same-store sales over the next six months fell 0.9 point in September, while the outlook for general business conditions fell 0.7 point.

Capital expenditure indices for both recent and anticipated purchases were down sharply. The index number for those expecting to make a capital buy within the next six months fell 1.7 point as the percentage of those planning to spend for equipment and facilities fell to 37% from 45% in August. The comparable figure measuring capital purchases within the past three months fell 0.9 point, again as only 37% said they made such purchases, the lowest reading since March.

Section sponsored by Integrated Control Corp.

Technomic: Bleeding At Full-Service Ops Slowed In September
Full-service operators continued to see sales decline in September compared with the year prior, but not as badly as in August, research firm Technomic Inc. reports. The data come from the firm's new SalesMetrics report, developed with partner GuestMetrics. The research product tracks point-of-sale transaction data from more than 2,700 chain and independent full-service restaurants nationwide.

Sales fell 6.3% in September compared to year-earlier levels, compared to a brutal 12% decline in August compared to year earlier. Traffic was off 6.1% nationally, with chain locations experiencing a steeper 6.6% drop compared with a 5.7% decline at independents. Chains did better on check average, however, down 4.4% versus independents' 6.4% drop. From a daypart standpoint, dinner traffic was off the most, down 6.8%. Lunch did better, down 5.3%.

Further information on SalesMetrics and other Technomic research products is available on the firm's Web site,, or by calling Patrick Noone at 312/506-3852.

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