Foodservice Equipment Reports

FER Forecasts The E&S Market Will Begin To Grow Next Year

While many challenges remain, Foodservice Equipment Reports forecasts the foodservice equipment and supplies market will grow in both real and current dollars in 2011, following a third-straight year of declines in 2010. FER Publisher Robin Ashton presented these predictions Aug. 4 at the magazine’s annual President’s Preview E&S Market Forecast meeting, held at the Orrington Hotel, Evanston, Ill.

The magazine forecasts E&S sales at the manufacturer level will grow 1.6% in current dollars in ’11 and show a 0.9% real gain. Overall prices are forecast to increase 0.7% next year.

FER revised its forecast for ’10 down slightly and raised its estimate for ’09. Sales are now estimated to have fallen 13.8% in nominal dollars and 11.5% in real terms in ’09. Current-dollar sales are forecast to fall 5.7% this year and decline 5% in real terms. The magazine says E&S prices fell in both years.

Ashton and his forecasting partner John Muldowney, v.p.-marketing at Alto-Shaam, told the assembled manufacturers and operators that the very weak jobs environment is at the heart of the foodservice malaise. “With nearly 10% unemployed and another 7% underemployed, a significant part of the customer base has simply had to reduce its foodservice usage,” Ashton said. “Even the most well-off, the heaviest users of foodservice, have cut back.” All this has operators sitting on their wallets when it comes to buying equipment and supplies.

But Ashton and Muldowney see some positives beginning to emerge. Operators are adjusting to the new reality and beginning to look at equipment as a way to enhance profitability through energy savings and menu flexibility, Ashton said. He cited the McDonald’s beverage program, fast-oven programs from a number of chains, and the growing acceptance of combis and other highly flexible platforms.

In addition, “Three years is a long time for high-volume operators to hold things together,” Ashton said. “There is a great deal of pent-up demand out there.” Factors such as these led Ashton and Muldowney to forecast positive real growth for E&S sales not only next year but for the period ‘12 through ’14.

The meeting also featured an in-depth look at historical E&S pricing trends from David Greene, president of European Operations for AutoQuotes Inc., and analyses of the top 100 E&S manufacturers and top dealers by Ashton and Muldowney. Tom Stundza, former executive editor at Purchasing magazine and now senior principal analyst at IHS Global Insight, presented exclusive forecasts of commodity prices for materials commonly used in foodservice E&S.

Ashton will present the forecast again through an online webinar scheduled Nov. 3. This update will include revisions of the forecasts based on new data. Those attending the August meeting can attend the webinar and receive the updates for no charge.

In the meantime, the entire forecast package is available for $449. Purchasers will receive the entire seven-section forecast. Past attendees of our forecast seminars or other meetings qualify for a discount. To order or for information on participating in the forecast webinar, e-mail Robin Ashton at rashton@fermag.com or call the magazine’s office at 800/986-9616.

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