Foodservice Equipment & Supplies

JUN 2018

Foodservice Equipment & Supplies magazines is an industry resource connecting foodservice operators, equipment and supplies manufacturers and dealers, and facility design consultants.

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40 • FOODSERVICE EQUIPMENT & SUPPLIES • JUNE 2018 non-commercial segment, including corporate dining, healthcare foodservice and even college foodservice operators, must now include various forms of customer-facing technology in their plans moving forward. What once was a nice to have has become a have to have for foodservice operators. For ex- ample, as most of the industry comes to grips with customer traffic levels that range anywhere from flat to up 1 percent, for the most part, restaurant visits via mobile app are up 50 percent, according to data from The NPD Group. In other words, technology is fast becoming a necessity for opera- tors who want to simply maintain market share. In addition, labor remains a constant con- cern that keeps many foodservice operators up at night. A relatively stable labor market throughout the country means foodservice operators com- pete with other businesses to attract and retain talent. And when they do snag that talent, today's operators often have to pay a premium, stressing an already taught business model. To respond to labor challenges, third- party delivery and other factors, operators keep looking inward. Specifically, many continue to rethink their unit design and prototype to make their businesses more effective and efficient to operate. This includes maximizing labor, expanding into other dayparts and even plac- ing their restaurant operations closer to their customers. For example, in response to declin- ing customer traffic and consumers' increasing desire to consume food off-premise, operators are now contemplating dark kitchens – sites only accessible by employees, delivery drivers and suppliers. These facilities exist only to create food and deliver it to hungry customers and can really have a positive impact on a business by lowering real estate costs, shifting employees to more impactful roles and more. As operators focus more on industry-spe- cific issues, their economic concerns no longer play as influential a role in how they purchase foodservice equipment and supplies, relative to recent years. In fact, only 61 percent of opera- tors made changes in their purchasing behavior, according to FE&S' 2018 Operator Purchasing Study. That's down 10 percent from 2016 and 20 percent from 2014. EQUIPMENT PURCHASES BY CHANNEL The majority of commercial operators — 49.54 percent — continue to make equipment purchases through traditional foodservice equipment and supplies dealers according to FE&S' 2018 Operator Purchasing Study. That percentage, however, represents a drop from the 54.15 percent that reported the same purchasing approach in FE&S' 2016 study, the last time the study was conducted. Non-commercial operators followed the same trend line, with 49.02 percent reporting purchasing equipment from traditional foodservice equipment and supplies dealers in 2018, compared to 45.30 percent reporting the same thing in 2016. Commercial Operators Non-Commercial Operators Traditional Foodservice Equipment and Supplies Dealers – 49.54% Traditional Foodservice Equipment and Supplies Dealers – 49.02% Broadline Distributor – 14.8% Broadline Distributor – 19.62% Online Foodservice Equipment and Supplies Store – 10.68% Online Foodservice Equipment and Supplies Store – 10.02% Specialty Distributor – 8.56% Direct from Manufacturer – 13.09% Specialty Distributor – 6.59% Buying Group/ Group Purchasing Organization/Co-Op – 4.11% Foodservice Cash and Carry Stores – 1.07% Club Store (Costco, Sam's Club, etc.) – .12% Buying Group/Group Purchasing Organization/ Co-Op – 7.53% Direct from Manufacturer – 2.74% Club Store (Costco, Sam's Club, etc.) – .97% Other – .89% Foodservice Cash and Carry Stores – .65% 2018 OPERATOR PURCHASING STUDY

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