NAFEM 2013 exhibited very positive vibes. The mood was as sunny inside as the bright Orlando day outside. Although the aisles were not jammed with attendees, an overwhelming majority of the exhibitors with whom I spoke were quite pleased with the results. This was an improvement over NAFEM 2011, which was cautiously optimistic. And quite a contrast to the bleak emptiness of NAFEM 2009. (IHMRS in November was also upbeat, although that show is a shadow of its former self.)
At the end of February, the NRA Restaurant Performance Index (RPI) reported net positive same-store sales for the 20th consecutive month. A week later, the CRFA Show in Toronto set new attendance records. On March 21 a WSJ headline reported, “Existing-Home Sales Hit Highest Point Since 2009.” Is this a happy coincidence or a sustained trend?
In fact, the 18-month contraction of the last business cycle ended in June, 2009. It took another 15 months, until September 20, 2010, for the National Bureau of Economic Research (NBER) to announce that the contraction ended the year before. The NBER has calculated that the average length of expansion in the 11 business cycles since 1945, the end of World War II, is 59 months.
Now, 30 months into this business expansion – halfway through the average duration – some operators see the light.
On the one hand, FE&S observes, “… operators are holding on to their equipment longer than before, as our studies show they continue to repair rather than replace.” Yet, the NRA RPI reports, “Restaurant operators are also more bullish in their plans for capital spending in the months ahead. Fifty-nine percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up from 50 percent who reported similarly last month.”
Two and one half years into the current expansion, operators are shifting from the low cost, quick fix to investing in equipment that delivers longer term value of energy efficiency, productivity improvement and quality consistency.
Now is the perfect time to launch new products, beef up your marketing campaigns and sell smarter and harder. If not now, when?