The MAFSI Business Barometer, for the third quarter of 2017 advanced by +2.6%, short of both a forecasted +3.5% and a second quarter (Q2/17) advance of +3.5%. This reflects a continuing trend over the past six quarters of slowing growth after five years of healthy gains between +4% and +5%. A further decrease in the growth rate to +2.4% is forecast for Q4/17.
By product type, the Q3/17 overall growth broke down as follows: Furniture +4.1%, Supply +2.8%, Equipment +2.6% and Tabletop +1.8%. By region, the gains varied from +5.8% Canada, +3.5% South, +2.8% Midwest, +1.2% Northeast, and +0.7% in the West.
Further evidence of slower growth ahead can be seen in the fact that 30% reported more quoting activity versus 46% more in both Q2/17 and Q1/17. Consultant activity is slowing down as well, at 26% more versus 33% more in Q2/17 and 37% more in Q1/17.
In summary, virtually every metric surveyed by MAFSI reflects slower growth. While still positive in the mid two-percent range, this is half of the level that became the industry norm over the past six years.
While some of the third quarter drop-off might be attributable to the fall hurricanes that affected Texas, Florida and the Caribbean, there are greater storm clouds on the horizon. NRA reports growth in just four of the last 22 month. Saturation in many markets is a major problem as chain restaurants grew at twice the rate of the population over the past 20 years. Quick service restaurants, particularly in shopping mall locations, are hurting as store purchases shift to e-commerce.
NPD recently published a report, “Losing our Appetite for Restaurants,” which comments on six quarters of no growth for the first time since the recession of 08/09.
On the other hand, many segments of foodservice are quite healthy such as Meal Kit Delivery (think inside the box), B&I, Health and Senior Care, Supermarkets, Stadiums, K-12 and College and University, and trendy micro-restaurant chains in major cities.
Click here to see the full Q3 2017 Commercial Foodservice Business Barometer