Foodservice And E&S Markets Topping Out In U.S

The foodservice and foodservice equipment and supplies markets in the United States and Canada are most likely reaching the top of the current economic cycle this year and next, according to current forecasts, including Foodservice Equipment Reports’ 2015 and 2016 E&S market forecasts released in late July.

“We expect 2015 to be the peak of the current E&S market cycle,” FER Publisher Robin Ashton told those attending the magazine’s annual President’s Preview E&S Market Forecast meeting, held July 28 in Chicago. FER forecasts the E&S market in the U.S. and Canada.

FER forecasts growth in 2015 will reach 4.8% nominal and 2.5% real, factoring out expected net price increases of 2.3%. This compares with estimated growth of 4.4% nominal and 2.3% real in 2014.

The forecast for 2016 in current dollars is 4.6%. Real growth, after factoring out an anticipated 2.1% increase in prices, is forecast again at 2.5%.  Next year will be the seventh consecutive year of growth for the E&S market in the U.S. and Canada since the industry experienced two years of declines in 2008 and ’09. The magazine forecasts that the E&S market will show moderately slower growth each through 2019.

The combined E&S market in the U.S. and Canada is projected to reach US$11.375 billion in ’16. FER bases its forecasts on market numbers from the North American Association of Food Equipment Manufacturers biennial “Size & Shape of the Industry” studies. (For information, go to nafem.org.)

Operator sales in the U.S. are also reaching their highest levels since the Great Recession. As reported in the previous issue of FER Worldwide Report (fermag.com/newsletter/worldwide-report.html), the Chicago-based foodservice research firm Technomic Inc. is forecasting nominal sales growth for all foodservice (including institutional segments) at 5.2% for 2015. Factoring out a forecast increase in menu prices of 3% this year, real growth is expected to hit 2.3%. The preliminary forecast announced in May for 2016 is for another good year, with nominal growth pegged at 4.9% and real growth of 2.5%. Joe Pawlak, v.p. at Technomic, told FER in early October that the firm is sticking with the forecasts at least until January.

Growth of the operator market in the U.S. is also likely to slow beyond 2016 as the growth rates for key general economic indicators that drive restaurant and foodservice spending, such as employment growth, and disposable income growth, are forecast to begin slowing.

Operator growth is already slowing slightly in the Canadian foodservice market, according to the 2016 forecast released recently by Restaurants Canada, as the drop in oil and other commodities prices impacts the Canadian economy (See related article this issue.)

For information on purchasing the FER E&S market forecasts, see fermag.com/research/research.html. For information on Technomic research products, go to technomic.com. Research from Restaurants Canada can be found at restaurantscanada.org.

RELATED CONTENT

Untitled design 2022 07 13T114823.757

Patience Pays Off for a Reach-In Repair

RSI’s Mark Montgomery's persistence and patience is key in repairing an operator's failing reach-in cooler.

Henny Penny

Oil’s Sweet Spot: How to Get There and Maintain It

Like many in the world of foodservice, you may assume that cooking oil performance is at its peak when you first start using it — but did you know there...

- Advertisement -

- Advertisement -

- Advertisement -

TRENDING NOW

- Advertisement -

- Advertisement -

- Advertisement -