Foodservice Equipment Reports

Still Plenty Of Worry About Gasoline Prices

As we reported last issue, observers of the foodservice market are worried about the impact rising gasoline prices may have on the recovery of the foodservice market.

While oil-price pressures have eased a bit during the past two weeks, gasoline prices continued to rise. The national average price moved almost 14 cents higher—to $3.52—for the week ending March 7, according to the U.S. Energy Information Administration. The average price is 33 cents higher than three weeks ago, an increase of more than 10%.

Observers and forecasters including Joe Pawlak, v.p. at Technomic Inc., and Hudson Riehle, senior v.p of the Research and Information Group at the National Restaurant Association, have expressed concern that the upsurge in gasoline prices could undermine the still fragile recovery in foodservice spending. Restaurants near major arteries and interstates will likely be the first to see traffic and sales declines if American consumers begin cutting car use. But all foodservice operators could feel the pinch if the increased fuel prices dampen consumer spending.

So far, the gas price run-up has not significantly affected consumer confidence. The index maintained by Reuters Thomson/University of Michigan Surveys of Consumers and The Conference Board both reported strong gains in confidence at the end of February. But the surveys were fielded before the most recent run-up. At this point, it’s simply a wait-and-see situation.

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