Foodservice Equipment Reports

HOW ARE THE CUSTOMERS DOING?

In our annual forecast articles in the January issue of Foodservice Equipment Reports, we look not just at how the equipment and supplies market will fare this year (a very moderate increase), but also at the state of the customers. If you haven’t seen your print copy yet, the articles are up on the website at fermag.com/about-us/current-issue.

After two or three years of declining customer traffic and sales, commercial restaurants finally saw some slight gains in the third and fourth quarters last year. Restaurant traffic was close to flat overall in the third quarter, according to The NPD Group, which tracks customer visits through consumer panels. And the research firm forecasts commercial traffic will grow 1% in both the fourth quarter 2010 and the first quarter this year. We’ll see if that happens, given the extreme weather on both coasts in December, but the outlook is positive.

Technomic Inc. is forecasting another year of slight real-sales declines in ’11, thanks almost entirely to another 1% drop in full-service restaurant sales. Full-service has been severely battered by the downturn. Higher average checks and the emergence of fast-casual concepts and expanded menus at quick-service restaurants have severely undercut the full-service value proposition in these tough times.

In this light, it’s heartening that Technomic, which tracks same-store sales for scores of chains, reported a slight 0.8% increase in its weighted average of full-service same-store sales the third quarter last year. It was the first positive quarterly number in three years.

Beyond restaurants, some segments such as business and industry and catering, as well as noncommercial segments highly dependent on public funding, such as corrections, are still hurting big time. But a number of other segments such as lodging, colleges and universities, senior living, schools and military foodservice are expected by Technomic to show real growth this year.

One of the reasons we forecast growth in E&S sales this year is these healthier operators will need to replace worn out equipment and rebuild depleted supplies and tabletop stocks. Now’s the time to ask.

Cheers,



Robin Ashton

Publisher

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