Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
December 12, 2006

Regulatory Report:
Sponsored by:
Franke Foodservice Systems
NYC: Trans Fat Out, Calorie Counts In
EU Health Ministers Okay WHO's Fat Fight
Atlantic City Ban May Spell End Of Smoking In Casinos
Macomb County, Mich., To Pull Plug On Uncertified Managers

Industry Report:
Sponsored by:
Server Products
Structural Concepts' Clean Sweep Wins IH/M&RS Award
IH/M&RS Hands Out Gold Keys At 91st Show
FSTC Celebrates 20 Years Of Equipment Testing
Survey Says: An Ounce Of Certified Manager May Be Worth A Pound Of Cure
Wal-Mart LEDs The Way With Reefer Display Lights

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In This Section:
Public E&S Companies Post Double-Digit Third-Quarter Growth
Optimistic NRA To Release Forecast Today
Overall NRA Index Dips, But Expectations Remain Positive

This issue's Regulatory ReportSponsor: Franke Foodservice Systems
Industry Report
Sponsor: Server Products
Economic Report Hotelex Shanghai, April 4-7, 2007

Public E&S Companies Post Double-Digit Third-Quarter Growth
Ten large public equipment and supplies companies grew revenues an aggregate 12.8% in third quarter 2006, compared to year-earlier figures. The strong quarterly results brought sales growth for the first nine months of '06 to 7.6% versus the same period last year. The numbers come from a just-released, exclusive analysis by John Muldowney, principal at Clarity Marketing, Tipp City, Ohio.

In comparison, 11 companies reported 6.1% increases in both the first and second quarters of '06.

The third-quarter gain is one of the largest since Muldowney began analyzing E&S public company statistics three years ago. The numbers mirror results from the Business Barometer maintained by the Manufacturers' Agents Association for the Food Service Industry, which posted a record gain of 4.5% in the third quarter over comparable year-earlier figures. The MAFSI Barometer registered 3.4% growth in the second quarter and 2.7% in the first.

The seven equipment companies included in the 10-company analysis reported revenue increases of 12.4% for the quarter and 7.7% for the nine months. All but one of the companies recorded gains; the exception said sales were flat. Three supplies oriented companies reported a 13.8% rise in revenue in the third quarter and were up 7.1% for the nine months.


Section sponsored by Hotelex Shanghai, April 4-7, 2007

Optimistic NRA To Release Forecast Today
Looks like another growth year ahead for foodservice, according to the National Restaurant Association.

"Like this year, 2007 is shaping up to be a record breaking year for the restaurant industry," Hudson Riehle, senior v.p. of research and information services at the NRA, told FER Fortnightly last week as he put the finishing touches on the organization's annual forecast.

Riehle said the NRA would be releasing the forecast at a press conference at the National Press Club today. The presentation is to feature Riehle; NRA Chairman Ed Tinsley, CEO of Tinsley Hospitality Group; and NRA President and CEO Steven C. Anderson.

"We expect solid sales and employment growth," Riehle added, noting the industry would remain "the cornerstone of the nation's economy."

In addition to hard number forecasts of foodservice growth in '07, the forecast includes extensive analysis of consumer and operator trends. The complete forecast is available from NRA for a nominal fee. For more information, call 800/482-9122 or go to NRA's Web site,

Meanwhile, Technomic Inc., Chicago, which prepares the industry's other leading forecast of operator performance, is sticking with its '07 forecast of 3.8% nominal, 1% real growth for foodservice as a whole. Both forecasts are down only 0.1 point from '06 forecasts.

"We haven't made any changes to the '07 forecast," said Joe Pawlak, Technomic senior v.p. "Not much has changed in terms of trends since September. I think we're cautiously optimistic" about next year, he says.

Pawlak added that the softness in the casual dining segments "goes beyond just higher gas prices and less consumer discretionary income because of that." He said the segment may have raised prices a bit too much as operators responded to cost and competitive shifts. "We think that casual dining is going to need to re-engineer itself to meet consumer demand for value and convenience," he said.

Section sponsored by Hotelex Shanghai, April 4-7, 2007

Overall NRA Index Dips, But Expectations Remain Positive
Same-store sales and customer traffic fell back in October, driving the Current Situation and overall Restaurant Performance Indexes lower, according to the latest survey from the National Restaurant Association. However, three of the four components of the Expectations Index rose, signaling at least some operator optimism for the near future.

The overall Index, at 101.2, remains above the 100-point threshold that delineates expansion versus contraction. The Current Situation and Expectations Indexes also remain above 100.

The Current Situation Index fell 0.7 point, to 100.4, in the October survey, as sames-store sales dropped 1.4 points and traffic was off 1 point. The component tracking capital expenditures made during the past three months also fell 0.8 point.

The Expectations Index nudged up 0.1 point, to 102, as same-store sales, staffing and capital expenditure components rose. Only the outlook for business conditions fell in October, to 101, down 0.7 point.

The declines follow a strong bounce-back in readings in the September survey, the first after gasoline prices fell dramatically in early fall.

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