Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
December 15, 2009

Regulatory Report:
Sponsored by:
Manitowoc Foodservice
N.J. Senate Pushes Calorie Posting Toward Vote
Virginia Slims Smokers' Opportunities
L.A. May Ban Patio Smoking By Year's End

Industry Report:
Sponsored by:
Hotelex 2010
Obituary: Pioneering Rep Ed Gregory
Phil Morton, Quiet Leader, Retires From Gaylord
Corner Bakery To Add 23 Stores
Krispy Kreme Awards Franchise Rights for Thailand, Dominican Republic
Ruby Tuesday's Stakes Claim in Middle East
London To See First Chipotle

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In This Section:
NRA Performance Index Rises Two Years Into Recession
Job Losses Slow In November, Unemployment Dips To 10%
Consumer Confidence Up, Down, Plus Other Trendy Notes
Newly Revised FER E&S Market Forecast Available For Mere Pittance

This issue's Regulatory ReportSponsor: Manitowoc Foodservice
Industry ReportSponsor: Hotelex 2010
Economic Report Internorga 2010

By Robin Ashton

NRA Performance Index Rises Two Years Into Recession

Up is better than down, but the "waffling" exhibited recently by the National Restaurant Association's Restaurant Performance Index continues. The RPI bounced back half a point in October, reversing a two-month decline. The overall Index hit 98, fueled by positive movement in all eight components—four charting current conditions, four looking at prospects six months out.

Even with the rise, however, the index remains two full points below the 100 level that marks the dividing line between contraction and expansion for the restaurant industry. The RPI has now been in contraction territory for 24 months. In other words, the restaurant industry has been in recession now for two years. But the Index does stand 1.6 points above its cyclical low, which occurred in December 2008.

The best news in the October reading, in addition to all eight components moving higher, was strong gains in the two capital-expenditure measures. The number of surveyed operators making a capital-expenditure purchase the past three months rose to 40% in October, up from 37% in September. The improvement nudged that indicator up 0.6 point, to 98. The percentage planning such as purchase during the next six months jumped to 42% from 37%, moving that component up more than a full point to 98.4, the biggest rise of any of the eight components.

When economic indicators waffle back and forth, as the RPI has since late spring, it usually signals an impending change in direction. We can only hope it's true this round.


Section sponsored by Internorga 2010

Job Losses Slow In November, Unemployment Dips To 10%
Another bit of good news was announced early December, although one month doesn't qualify as a trend. The number of job losses shrank dramatically in November to a mere 11,000, according to the U.S. Department of Labor. The unemployment rate fell two-tenths of a point from its October level, to 10%.

The November report was the best monthly reading since December 2007, the last month of positive jobs growth. The reading caught many economy watchers by surprise, even though job losses have moderated gradually nearly all year since the horrendous losses in the first quarter of '09.

Still, 15.4 million workers were without jobs in November, 7.9 million more than in December '07, when the unemployment rate stood at 4.9%. Another 9.2 million Americans are underemployed for economic reasons.

The November employment data are heartening. But most economists expect job losses to continue, though at slowing rates, through midyear next year. It will take a while longer before the economy, now beginning to expand, starts putting people back to work.

Section sponsored by Internorga 2010

Consumer Confidence Up, Down, Plus Other Trendy Notes
Among economic and foodservice-trend items we've seen the past couple weeks:

  • The University of Michigan's Consumer Sentiment Index fell a bit, and The Conference Board's Consumer Confidence Index rose slightly, in November. We'll call it a tie.

  • McDonald's comparable same-store sales in the U.S. fell in November for the second month in a row, though only 0.6%. Comp sales fell 0.4% in October, as we reported last issue. The negatives follow six years and three months of monthly comp sale gains in the United States. Sales worldwide rose 0.7%, as European stores posted a 2.5% gain.

  • Most of McDonald's rivals are posting significantly worse same-store sales as the recession finally catches up with the quick-service segment. Technomic's weighted Same-Store-Sales Index, which excludes McDonald's, has QSR sales off 2.88% for third-quarter 2009.

  • Commercial restaurant traffic for the year ended September was off 2.4%, according to the latest data from NPD Group's CREST studies, reported in Nation's Restaurant News. Since check averages were up only 2.2%, overall sales for the 12-month period were negative.

  • Seasonally adjusted eating and drinking place sales rose 1.3% in October over September, while grocery-store sales rose only 0.2%. Overall retail sales fell 8.8% in the month versus month prior. October eating and drinking place sales were only 1.5% higher than in October '08. And these are nominal numbers.

Section sponsored by Internorga 2010

Newly Revised FER E&S Market Forecast Available For Mere Pittance
You need to know what Foodservice Equipment Reports, the only organization making hard-number forecasts of the foodservice equipment and supplies market, believes will happen next year and beyond. Did you know we now forecast the market all the way into 2013? How can you possible plan and budget without it?

The revised FER forecast is available for $349, and while we balk at saying "only" $349, we'd point out you often spend more than that on business expenses that deliver virtually nothing useful to work with when all is said and done.

In addition to receiving an Executive Summary presentation, those purchasing the updated forecast will get six more sections in PowerPoint format, providing updated data and forecasts on macroeconomic, operator, materials-pricing and E&S sales trends, an overview of the Top 150 E&S Manufacturers from Clarity Marketing and historical data on E&S pricing from AutoQuotes.

Those who have attended FER forecasts or other meetings, or have purchased the forecast in the past, will receive a $50 discount. Those who attended the President's Preview Forecast Seminar in August get the revised forecast at no charge and should have received an e-mail link to the updates. For information, or if you missed the link, e-mail Robin Ashton at or Chris Palmer at, or call 800/986-9616.

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