MAFSI Barometer Shifts From Slow To Sluggish
The most recent quarterly Business Barometer fielded by the Manufacturers’ Agents Association for the Foodservice Industry shows modest growth in sales of foodservice equipment and supplies.
The reps reported sales growth of 1.5% for the first quarter of 2018. It’s the seventh straight quarter of slower growth. And while it is the weakest quarterly gain since Q3/10, the slim advance kept the MAFSI Business Barometer in positive territory.
Among the product categories, tabletop was up 2.8% and furniture up 2.4%. But equipment sales saw gains of only 1.4%, about half the 2.9% the category rose last quarter. Supply sales squeaked up a mere 0.9%.
Regional results were consistently sluggish, with sales up 2.0% in the Midwest and up 1.8% in the South. The West posted 1.1% gains, trailed by the Northeast at a skimpy 0.6%. Canada, where strong sales resulted in last quarter’s 5.5% growth, managed only 2.1%--still better than any region in the U.S.
A closer look at product sub-categories reveals negative results in some territories i.e. Ventilation in the South at -5.3% and Cooking Equipment in the Northeast at -3.2%.
The slower growth seems to be the affected by the QSR market, where store closings outnumber new openings at several major chains due to overexpansion and changing consumer tastes, particularly amongst millennials.
Somewhat better results are forecasted for Q2/18 at 2.2%. The pipeline is steady with 44% of reps reporting more quoting activity and 37% more consultant activity. In addition, mid-year price increases have been announced by many manufacturers, as a result of steel and aluminum tariffs and nickel price swings. Price increases tend to advance orders and should have a positive effect on Q2/18 and Q3/18 results.
The full Q1 2018 Commercial Foodservice Business Barometer is available at MAFSI’s website.