The Consultant - Q1 2009 - (Page 43) united states become technically worse, which will continue to erode consumer confidence. However,” he emphasized, “if we can recover psychologically as a society, and people start going back out to dinner, that will help to drive our industry back towards growth.” “Volatile and unpredictable” were the words used by Mark Fishman, president of dealer TriMark SS Kemp, Cleveland, OH, to describe the current state of the U.S, economy. “Keep in mind, Rust Belt states such as Ohio have been facing difficult economic conditions for some time now, as well as some of the highest home foreclosure rates in the nation,” he advised. “A lot of weaker area businesses have already closed, so those of us that remain have learned to survive and even prosper in hard times.” Having been in foodservice equipment and supplies distribution and sales for some 30 years, Fishman described current economic conditions as “a one-time event in my career. The intertwined mess we’re in is not the result just of Wall Street’s greed. Politicians at every level encouraged compliant local bankers to loan more than borrowers could afford to pay back, all in the name of the ‘American Dream.’ Investment bankers created bundled securities out of fractionalized mortgages, and hardly anyone ever truly understood the risks. Rating agencies were willing to qualify these skewed and unworthy securities. And all of us fell under the delusion that house prices would always go up. There’s a lot of blame to go around,” For Fishman, the bottom line for turning things around is, “Every one of us becoming willing to take responsibility for evaluating and understanding any business proposition we INTERNATIONAL As prices for essential commodities like steel rise, the cost of manufacturing foodservice equipment will inevitably follow. MARKET nesses are unable to get loans to fund growth plans that could help to jump-start the economy.” One bright spot for the U.S. foodservice industry, in particular, according to Pumphret, is the recent precipitous decline in gas prices, which leaves potential customers with more disposable income and reduces the costs of shipping and bringing goods to market. “Eating out has also become so much a part of our culture than even a severe recession can’t change the fact that approximately 50% of all meals in the U.S. are consumed away from home,” he pointed out. However, he added, the ongoing growth and competitive price points of retail food stores’ HMR programs are likely to cannibalize restaurant sales in the months ahead. Looking across his companies’ customer base, Pumphret sees noncommercial operations doing best, but even their budgets for new equipment are being shaved in an attempt to contain costs. Among those op- erators being hardest hit by the current economy, in Pumphret’s view, are “fast-casual and family-dining chains, as well upscale, white-tablecloth restaurants. The upscale end of the market was holding on nicely till around October 2008, and then the bottom fell out,” he related. “I expect their holiday season sales reports will be down, too.” As for 2009, Pumphret expects that “Project and spec orders will be the key for most factories revenue generation, because it looks like mom ‘n pop street business is going to be very depressed.” He added that many equipment manufacturers will also be introducing price increases in ’09, as steel costs are expected to remain historically elevated, and “most of us have been absorbing rising costs for as long as we can.” These factors, Pumphret related, will likely cause additional equipment-seller consolidations, as “our market is still over-served by factories, reps and dealers.” Overall, Pumphret’s greatest concern for ’09 is that “our economy will First Quarter 2009 43 PERSPECTIVES
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