Foodservice Equipment Reports


Steve Don called me a few weeks ago and asked if, in the light of the current economic turmoil, we are reconsidering our equipment and supplies market forecasts. We currently call for 4% nominal sales growth this year and 4.7% in 2012. At the time I said, “Not yet.”

But we’ve now seen four more weeks of gloomy talk and unsettling numbers. Consumer confidence has dropped again to almost record lows. Jobs growth has stalled. The debt crisis in Europe gets worse by the day. And Washington seems no closer to getting anything done than it did over the summer.

But we’re still not panicking and we have reasons for a little optimism. First, this year’s forecast is just about a lock. Growth in the first half of the year was so robust, it would take a plunge like that seen at the end of 2008 for us to miss our forecast target. The MAFSI Barometer was up 4% in the first quarter and 5.7% in the second. The seven public E&S companies we follow are up 7.7% in the first half. The group’s blended revenues grew a very strong 8.5% in the second quarter. And those seven companies account for more than $3.5 billion in E&S sales a year. So even if things soften in the third and fourth quarter, our 4% forecast appears safe.

Next year is more problematic. Forecasting today, we might cut a point or two from the 4.7% we predicted back in July. Manufacturers and dealers tell us operators are definitely getting nervous. The National Restaurant Association’s Restaurant Performance Index tanked in July, with operator business expectations and capital spending plans taking big hits.

Still, this has been a very unusual recovery for the equipment and supplies industry. E&S sales bounced back strongly last year even before some operators were showing better numbers, particularly on the full-service side. The only reason we can find for this phenomenon is that the foodservice recession has lasted so long—more than five years for some full-service segments—the pent-up demand to replace aged equipment and refresh tattered interiors in a highly competitive environment is overwhelming any caution operators may feel. We have a feeling this reality will carry into the new year. Let’s hope so.



Robin Ashton


Related Articles

Don’t Panic Yet

California Approaches Food Handler Law With Kid Gloves

Will Gas Prices Undermine The Recovery Of Restaurant Sales?