E&S Sales Growth Slowed 2Q, MAFSI Reports

Sales trends of foodservice equipment and supplies typically lag operator fortunes. This is certainly true in the second quarter of 2014, as growth slowed for the second consecutive quarter, according to the latest data from the Manufacturers’ Agents Association for the Foodservice Industry Business Barometer. But the reps surveyed for the report also expect a strong rebound in the third quarter.

Reps reported overall sales of like lines rose 3.1% 2Q vs. 2Q/’13, compared with a 3.3% gain in the 1Q and an increase of 4.8% in 4Q/’13. The winter lag impact was particularly apparent in the Northeast—the area most affected by the brutal winter weather—where overall sales declined 1.2%. But most other regions also reported moderate growth. Sales in the Midwest rose 3.5%, those in the West 2.8% and, in Canada, sales rose 3.9%. Reps in the South bucked the trend, reporting an overall 5.5% gain.

Equipment sales were the issue 2Q, the reps reported. Equipment sales rose only 2.9% and were off 2% in the Northeast. On the other hand, sales of durable supplies rose 4.5% and those of tabletop products were up 3.8%. Furnishings posted a 2.7% gain.

The reps forecast a strong rebound in the 3Q, predicting an overall 5.7% increase. Part of the reason may be that quotation and consultant activity remains strong. Of reps reporting, 56% said they are seeing more quotation requests while 47% are experiencing more consultant activity. Both numbers are at or near post-recession highs.

The MAFSI data contrasts with public E&S company performance 2Q. Preliminary data from seven of the eight companies tracked by John Muldowney, a marketing executive at The Boelter Cos., has combined estimated revenues rising 6% 2Q following a 7.4% gain 1Q. Combined sales for the five equipment-oriented companies were even stronger, up an estimated 7.6% in 2Q on top of a robust 9.5% increase 1Q. The big public conglomerates are more chain oriented and also benefit from export sales, which remain brisk.

The full MAFSI Barometer is available at mafsi.org.

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