E&S Sales Growth Slowed To 2.4% In First Quarter, Reads MAFSI Barometer

Sales of foodservice equipment and supplies grew a modest 2.4% in the first quarter of 2013, versus the comparable quarter last year, according to the quarterly Business Barometer maintained by the Manufacturers’ Agents Association for the Foodservice Industry. It was the slowest growth in any quarter since the Barometer signaled recovery in the fourth quarter 2010. The indicator has tracked slowing sales for three consecutive quarters; the Barometer rose 4.3% in the third quarter ’12 and 3.6% in the fourth quarter. Still, the Barometer remains positive for the 10^th consecutive quarter.

The Barometer’s 2.4% uptick compares to 1.8% growth of the seven publicly reporting E&S companies in the quarter. (See FER Fortnightly, May 15, 2013 issue.) The Barometer, a broad measure of the market, but one that excludes most export sales, has trended higher than the public companies’ growth rate for more than a year. The public company numbers have been dragged down by falling sales in Europe and slowing sales in Asia.

Other data from the reps surveyed for the tracking study indicate the market may strengthen as the year proceeds. “There is strong evidence to suggest that the market is just ‘taking a breather,'” wrote Michael Posternak, principal at PBAC, the New York-based rep firm, in his commentary accompanying the Barometer. The percentage of respondents reporting that they are quoting more rose to 48%, up from 44% last quarter and 39% in the third quarter ’12. More reps also reported increased consultant activity; 39% said they see more activity, up from 32% in the fourth quarter and 25% in the third. The forecast for second quarter sales growth is 3.1%.

“This means the pipeline is filling,” wrote Posternak, who also noted a “positive attitude” at the recent NRA Show.

The drop in the overall first-quarter growth rate was driven by lower sales of equipment and furnishings, which fell to 2.3% and -0.1% growth respectively in the first quarter, versus 4.3% and 2.2% in the fourth quarter. Supplies sales increased to 3.9% growth in the first quarter from 3.6% the previous quarter. Tabletop sales fell only 0.1 point to a 2.7% increase.

The slowdown was apparent across all five of MAFSI’s regions, ranging from 2.8% growth in the Northeast to 2.3% increases in the Midwest, West and Canada. Sales were up 2.6% in the South.

The complete MAFSI Business Barometer, which includes regional forecasts, is available at the group’s website, mafsi.org.      “””