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Nothing brings out the best in the foodservice equipment and supplies industry quite like The NAFEM Show. For three days it seems everyone is in the best possible mood while hobnobbing beneath NAFEM’s biennial big top. The burdens of business challenges seem to fade to the background as various new applications of stainless steel, melamine and even china have everyone forgetting the past, even for a moment — because, to paraphrase one-hit wonder Timbuk3: their future’s so bright they’ve gotta wear shades.Read more...
Labor costs usually represent the highest, or second highest, expense as a percent of sales for a restaurant. As such, proper labor management plays a critical role in driving better unit economics for a foodservice concept. If you buy into this principle, continue to read, and if you don’t then it is more important for you to continue to read on.Read more...
Sales among casual restaurant chains slowed in March according to Knapp-Track. Job openings hit a 14-year high in February. Some states go on record opposing the Sysco/US Foods merger. An Oakland, Calif. minimum wage increase leaves some businesses unhappy. These stories and more in This Week in Foodservice.Read more...
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The economic news continues to be mixed, so what does that mean for the foodservice industry?
Despite the fact that most observers feel the U.S. recession is over, the economy remains one of the most discussed and dissected topics today. Both political parties like to treat the economy as if it were a piece of shapeless clay, as they try to mold the country's economic performance to suit their own agendas. That leaves people like me, who are not economists and have never even played one on television, trying to develop a better understanding of today's business environment.
That's probably why I was one of the people in the audience who gladly soaked up a presentation by Forbes columnist Rich Kaalgard during the 2011 FEDA Convention in Phoenix. I thought Kaalgard did a great job of putting the current economic climate into context, something that seems to be generally lacking these days.
For example, Kalgaard projects that the U.S. will experience 3 percent to 3.5 percent economic growth this year, but few businesses will grow by that amount. Some will be up a lot more than that, while others will continue to see their sales decline. "The individual number almost does not matter," he said. "Individual company by individual company the results are so uneven that the growth number is an aggregate."
Still, the alarmist in all of us wants to portray the just concluded recession as the worst thing since the Great Depression of the 30s. But Kalgaard made a case that this cycle is much more similar to what happened in the 70s, another challenging economic period in our country's history. "We downplay the 70s because the 80s and 90s were so robust," he said. "There was a happy ending, but we don't know how this will end."
But the 70s were good for one thing--startups. Kalgaard pointed out that's when U.S. business leaders such as Federal Express, Southwest Airlines, Microsoft Corp. and Apple Computer first emerged. "The list goes on and on, and you realize that it was not a bad time for everyone," Kalgaard said.
That's something the foodservice industry experienced last year, for example. This is evident when looking at FE&S' 2011 Distribution Giants Study, where 56 companies reported an increase in sales, while 35 reported a decline in sales and 10 reported their revenues were flat year over year. So just because the overall revenue generated by the top 101 dealers (there was one tie resulting in the extra company being listed) increased by 2.96 percent, that does not mean everyone grew by that rate.
So what can we learn from the recent economic malaise? "When the tide goes out, the business models that are too slow and too bloated get exposed," Kalgaard said. "And when this happens, companies with newer business models begin to thrive."
So as the tide begins to rise, how's your business model? Is it ready to meet the challenges of the day?