Foodservice Equipment Reports

FER Forecasts The E&S Market Will Grow 4.1% In Current Dollars In 2017

Foodservice Equipment Reports predicts the foodservice equipment and supplies market will post nominal growth of 4.1% in 2017, with real growth of 1.8%, and also will continue to growth in both nominal and real terms through 2020. The latest forecasts were released during the magazine’s annual President’s Preview E&S Market Forecast meeting, held August 9 at the Westin O’Hare, Rosemont, Ill.

“The only thing worrying us is the slowdown in big chain sales and traffic in the first half of 2016,” said FER Publisher and Research Editor Robin Ashton, who partners with John Muldowney, principal at Clarity Marketing, to prepare the annual forecasts. “In typical E&S market cycles, the chains are the leading indicator for the direction of the base foodservice market,” Ashton told the attendees.

“But the general economic fundamentals remain very positive for foodservice. And there are indications some of the slowing may be the result of overbuilding by the larger chains and a switch in consumer preference, particularly in full service, to smaller chains and independents. We think the strengths greatly outweigh the weaknesses, but we’ve now warned you.”

The new 2017 forecast does predict a slowing of market growth from 2015 and 2016. The magazine estimates the market grew 4.8% in nominal terms and 2.5% after factoring out price increases in 2015. It left projected nominal growth at the current forecast of 4.6% for 2016. But new data on E&S list-price changes, compiled exclusively for the FER forecast by AutoQuotes Inc., led Ashton and Muldowney to boost expected price increases for both 2016 and 2017. This reduced the forecast for real growth in 2016 to 2.1% from the previously forecast 2.5%.

“The new AutoQuotes list-price-change data for 2015-16 surprised us,” Ashton admitted. “With an average increase of nearly 4%, manufacturers raised list prices more in the period from July 1, 2015 to June 30, 2016 than they had in any year since the commodity inflation days of 2007-08.”

“This E&S market expansion, while it has been moderate in historical terms, is very long in the tooth, now at seven years,” Ashton said. “But other than the big chain slowdown, we see nothing on the horizon to suggest anything other than a slowly tapering growth rate for E&S out through 2020.”

The complete FER E&S Market Forecast, which includes eight PowerPoint decks covering the general economy; U.S. and Canadian operator and international economic and operator trends; analysis of materials and commodities trends by Lisa Reisman, executive editor at MetalMiner; E&S manufacturer list-price trends from AutoQuotes; exclusive rankings of the Top 100 E&S manufacturers and dealers; and FER’s hard-number forecasts out through 2020, is available for $1,595. For information e-mail Robin Ashton at rashton@fermag.com or call 847/910-5163.  

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