Finishing Top Dealer And Looking At The Forecast

If you haven’t sent us your form for our annual Top Dealer listing, to be published in the June issue of FER, this is your absolutely last chance. Just to remind you, any dealer of any size can be listed in either our verified or “reported, not verified” listings. You just need to fill out a .pdf form (available here) or the Survey Monkey form online (go here.) We close it up on Friday, Apr. 24.

Chris Palmer and I haven’t tallied up what’s come in yet, but it does appear a lot of dealers, large ones especially but not exclusively, had very good years in 2014.

Which we find very interesting because, at the same time, our friend John Muldowney, principal at Clarity Marketing, and I are looking at our equipment and supplies market growth forecasts for last year and this. We now have full numbers for 2014 from the nine publicly reporting E&S companies John tracks for us, and from MAFSI’s Business Barometer.

The publicly reporting companies’ growth slowed to 2.7% in the fourth quarter versus the same quarter in 2013, after four quarters of growth exceeding 6.5%. The MAFSI Barometer rose 2.9% in the quarter versus year prior, slowing from 3.8% in the third quarter.

This slowdown in E&S sales is surprising given that operators, especially full-service restaurant operators, had the best quarter in traffic growth they’ve seen since before the recession. according to the NPD Group, the National Restaurant Association and other research groups. Limited-service concepts, which include hot fast-casual chains, also saw traffic and sales increase. It could just be the traditional lag in capital spending, i.e, things have to get better before an operator considers spending money for equipment and facilities. In 2014, the brutal winter weather in the first quarter and the run-up in food prices in the first half cut into both sales and profit margins.

Still, for the year as a whole, public companies saw combined sales rise 5% and the six equipment companies’ sales rose 6%. The MAFSI Barometer averaged a 3.3% gain across the four quarters. Our current estimate for last year is 4.4% total industry. The forecast for 2015 is 4.8%.

I’m still bullish on growth this year. The winter wasn’t as inclement and early numbers suggest operator sales and traffic gains continued in the first quarter. Food price increases have slowed. We’ll have to wait for first quarter E&S numbers before we see if the slowdown in the E&S market continued, but NRA’s capital spending components of the Restaurant Performance Index remain strong.

John and I will hash it out over the next two weeks. We’ll let you know if we change anything.

Cheers,

Robin Ashton

Publisher

rashton@fermag.com