Despite Missing Expectations, Reps Believe Sales Will Pick Up

Growth in foodservice sales slowed in the third quarter, failing to meet expectations, according to the MAFSI Business Barometer.

The measurement, which is determined through a survey of manufacturers reps, saw gains of only 1.8 percent for the period covering July 1 to Sept. 30, 2019. That was a drop from the 2.7 percent growth in the second quarter and less than the 2.9 percent growth previously forecasted. Further, it was only the third time in the past 9 years that quarterly sales growth was less than 2 percent.

Despite the lower-than-expected numbers, reps are expecting sales to pick up in the coming months. MAFSI reported that reps are forecasting a gain of 2 percent for Q4 and 3 percent for 2020 due to low interest rates, the smallest unemployment rate in 50 years, a strong stock market, higher consumer confidence, and the easing of worries over a recession.

In Q3, the region that saw the most growth was the Midwest, at 3.2 percent, followed by the West (2.4 percent), Northeast (1.2 percent), Canada (1 percent), and the South (0.8 percent). Supplies led by product type, with 2.5 percent growth, followed by equipment (1.8 percent), tabletop (1.8 percent), and furniture (1 percent).

Trends and issues to be aware of in 2020 include the transitioning from food courts to food halls, the move from food trucks to pop-ups and ghost kitchens, the impact of Brexit, the popularity of plant-based meat replacements, the effects of tariffs and trade wars, and the continued impact of delivery apps.