Heard In the Aisles At NRA: Operator Sales, E&S Market Looking Stronger

Generally, the mood and attitude of nearly everyone—operators, dealers, consultants and manufacturers—we spoke to at the National Restaurant Association’s annual show in Chicago May 18-21, was good. Most reported a slow, but not disastrous, first quarter. The first-quarter numbers from MAFSI and the publicly reporting E&S companies bear this out with very modest sales growth of 2.4% and 1.8% respectively.

Our friends at Technomic shared their preliminary chain same-store sales data with us (see FER Fortnightly, May 15, 2013) and with 46 chains reporting, half were down and half were up. If you include McDonald’s, which had its toughest quarter in years, the weighted results are negative; if you take them out, which is what we normally do since Mickie D’s is so large it skews the results, the numbers are slightly positive.

That’s the recent history. You may recall in late March we lowered our forecast of E&S market growth for 2013 to 3.8% in current dollars. That’s because we’d been hearing all of what the numbers now show.

The last day of the NRA Show, Technomic released its revised forecast for ’13 and its first for ’14. We were actually surprised they lowered this year’s forecast only 0.1 point from their January revision, given how slow operator sales and traffic were in the first quarter. It signals they expect sales to pick up as the year wears on, though the number, 3.8%, is nearly two-and-a-half points lower than their revised estimate of 5.2% industry growth last year.

We’re sticking with this forecast for now, but frankly we may have overshot downwards. I have a sense the rest of the year will be better, for operators and for the E&S market.