American Restaurant Industry Starts to Simmer, Says GE Capital

Press release:


27 March 2012

American Restaurant Industry Starts to Simmer, Says GE Capital

Increased consumer spending and foot traffic boost expectations

SCOTTSDALE, Ariz.--27 March 2012-- The American restaurant industry is starting to simmer. Consumers are spending more on meals, and foot traffic at establishments is improving, albeit from a diminished base, according to the 22nd edition of the Chain Restaurant Industry Review, released at this week’s Restaurant Leadership Conference by GE Capital, Franchise Finance. As sales trends recover, operators are translating those positive feelings into a greater willingness to invest in their businesses. And with increasingly accessible credit, they’re able to commit to higher capital expenditures.

“The restaurant industry has come through the upheaval of the past several years by listening closely to the consumer and adapting to their changing tastes – and they’ve done it well,” said Agustin Carcoba, president and CEO of GE Capital, Franchise Finance. “Depending on their segment, brand and focus, operators have emphasized food quality, service quality, menu options and other factors that will lead to renewed growth this year and in the years ahead. Even better, operators did it all while managing operational costs.”

Consumers spent $406.6 billion at restaurants in 2011. For 21 consecutive months, they spent more at restaurants than grocery stores, and that trend is expected to continue. Last year, quick-service restaurants (QSR) accounted for 48.0 percent of that figure, while full-service restaurants (FSR) counted for 48.1 percent. The QSR category includes limited service, fast casual, take-out locations and snack and non-alcoholic beverage bars, while FSR includes family, casual, high-end casual and fine dining establishments.

Operators’ improved expectations can be partially attributed to positive results that were sustained throughout last year. QSR same-store sales grew 3.2% last year – ahead of the FSR rate of 2.4%. QSR benefitted from eight consecutive periods of growth due to more consistent traffic, while FSR relied more on menu price increases and higher average checks.

“Restaurateurs are no longer in survival mode; now they’re planning for the future,” said Trey Brown, commercial leader of GE Capital, Franchise Finance. “To capture that growth and maintain a competitive advantage, they’re investing in their businesses by building new stores, remodeling existing ones or investing in new equipment.”

The level of liquidity available in the restaurant space continues to improve. Merger and acquisition activity – an indicator of the popularity of the restaurant industry among investors – increased last year. Total syndicated volume in the restaurant space increased more than 26% to almost $12 billion in 2011. Strategic buyers returned, such as American Blue Ribbon Holdings LLC, Darden Restaurants and Landry’s Inc. Private equity firms were also active; for example, Golden Gate Capital acquired California Pizza Kitchen.

“We expect restaurants to continue to be appealing acquisition targets because of the ongoing increases in food dollars spent away from home, as well as the scalability of this business model,” Brown added.

About GE Capital, Franchise Finance

GE Capital, Franchise Finance is a leading lender for the franchise finance market via direct sales and portfolio acquisition. With more than 30 years of experience and $10 billion in served assets, we serve over 3,000 customers and over 18,000 property locations. We specialize in financing mid-market operators with multiple stores in the restaurant and hospitality industries. Our team of industry experts will work with you to help develop your own growth plan with access to our proprietary industry research and customized tools. More information is available atwww.gefranchisefinance.com.

GE Capital offers consumers and businesses around the globe an array of financial products and services. For more information, visitwww.gecapital.com or follow company news via Twitter (@GECapital).

GE (NYSE: GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. For more information, visit the company's website at www.ge.com.

15 Large Corporations Seek to Bolster U.S. Economy by Providing Access to $300 Billion in Supply Chain Spending to Small Businesses

Fifteen Large Corporations Seek to Bolster U.S. Economy by Providing Access to $300 Billion in Supply Chain Spending to Small Businesses

Small Businesses Gain New Contracts, Grow Business

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New York - 22 Mar 2012: Fifteen large corporations today announced that thousands of small businesses have a new way to do business with them, giving them access to the $300 billion that these corporations spend annually on goods and services. (#connectbiz)

Small businesses, which are catalyst for the U.S. economy now have access to the supply chains of these 15 corporations by introducing them to a free Web site called Supplier Connection. This portal is similar to the Universal College Application, where a potential vendor need only fill out simplified forms once to be considered for many types of contracts for goods and services.  Through the platform, small businesses can offer their goods and services to many large enterprises with the goal of winning contracts, growing their business and creating jobs. The website was created and is maintained by IBM through a grant of more than $10 million from the IBM International Foundation. 

In New York City, Stanley Litow (left), President of the IBM International Foundation and Small Business Administration (SBA) Administrator Karen Mills (right) sign an agreement to launch Supplier Connection.

“A recent national study revealed that within two years of winning a contract with a large company, small businesses doubled their workforce. Clearly by streamlining access to large company spending, we can help more small businesses create jobs,” said Stanley S. Litow, IBM Vice President of Corporate Citizenship and President of its Foundation. “By reducing complexity and offering access to spending by a group of large companies, Supplier Connection will help small businesses grow and improve their bottom line. The clear benefit to large companies is the access to the creativity and innovation of small businesses.”  

Currently there are nearly 1,000 small businesses registered in the Supplier Connection program with more than 250 large company buyers actively searching for potential suppliers across 20 categories. One small business that has found success using the platform is Bottini Fuel, a provider of heating oil, propane, heating and air conditioning services based in New York’s Hudson Valley. Seeking to expand their commercial sales channel, small business owner Rick Bottini joined Supplier Connection to take advantage of the streamlined application process. Bottini Fuel became a new supplier to IBM’s operations in Poughkeepsie, New York providing fuel and service to power 24 backup power generators used at the 400-acre site where IBM’s mainframes are developed and manufactured.  

"Becoming a supplier to a global business like IBM is something most small businesses envision as a daunting task," said Rick Bottini, Owner of Bottini Fuel based in Wappingers Falls, New York. "Using Supplier Connection we were able to establish a relationship with IBM and respond to their request for competitive bids in a timely manner. Having access to a powerful tool like Supplier Connection levels the playing field for a small business while helping save us valuable time and resources."

Small business owner, Kurt Peterson, joined Supplier Connection less than one year ago and recently secured a contract through the Supplier Connection portal. “It is a resource that U.S. small businesses need,” said Peterson, president of Puritan Press, a printing and publishing company based in Hollis, New Hampshire. “With Supplier Connection, Puritan Press can now have increased visibility by the procurement offices of large corporations. Now, with a win through Supplier Connection, we look forward to increasing our revenue, strengthening our long-term business strategy and possibly expanding our employee base to meet business demands.”  

Recognizing the possible impact this program could have on job growth among small businesses, Supplier Connection has doubled the number of large businesses in the initiative. New large companies to the consortium include: AMD (NYSE: AMD), Caterpillar (NYSE: CAT), Dell (NASDAQ DELL), Facebook, John Deere (NYSE: DE), JP Morgan/Chase (NYSE: JPM), Kellogg Company (NYSE: K), Office Depot (NYSE: ODP), and Wells Fargo (NYSE: WFC). These companies join founding members of the group: AT&T (NYSE: T), Bank of America (NYSE: BAC), Citigroup (NYSE: C), IBM (NYSE: IBM), Pfizer (NYSE: PFE), and UPS (NYSE: UPS). Currently, the members of Supplier Connection purchase more than $300 billion in goods and services annually through their global supply chains.  

The Supplier Connection program is a free program for both small businesses and large businesses. In addition to its one-stop registration capabilities, the portal enables small suppliers to learn from, collaborate with, and partner with each other so that they can become more competitive and successful in a bid with a large company.  

About Supplier Connection: Supplier Connection is a cloud-based platform that makes it easy for small business to become recognized as potential suppliers to large companies and for large companies to identify small companies with whom they would do business. To learn more about Supplier Connection, visit www.supplier-connection.net.

Ryan Stokes Budget Battle with New 'Blueprint'

Excerpt from an article in

The Hill.com

Ryan stokes budget battle with new ‘blueprint’ 
By Peter Schroeder

A fresh budget proposal this week from House Budget Committee Chairman Paul Ryan (R-Wis.) will usher in another round of fighting over the federal pocketbook.

Ryan is expected to announce his “Blueprint for American Renewal” on Tuesday at the American Enterprise Institute. His budget panel is expected to follow that up with a markup of the package Wednesday.

The Republican proposal will be met with a barrage of Democratic attacks if, as expected, it sets a lower spending cap than agreed to as part of the summer’s debt-limit deal. House GOP leaders are selling a $1.028 trillion spending cap to their members, down from the $1.047 trillion deal hammered out last summer. Some conservatives are pushing for even stricter limits.

In the Senate, lawmakers will continue work on a bill aimed at making it easier for startup companies to raise capital. But some Democrats have aired concerns that the bill does that by rolling back key investor protections, and are pushing to strengthen that aspect of the bill before advancing it.

Elsewhere on Capitol Hill, the European debt crisis will be a hot topic, just days after the International Monetary Fund signed off on its $37 billion contribution to a broad bailout package for Greece. On Tuesday, Treasury Secretary Timothy Geithner will visit the House Financial Services Committee to discuss the state of international finance, and the House Oversight and Government Reform Committee is devoting a Wednesday morning hearing to Europe’s debt woes.

News Release from American Express - Cash Is King

Cash is Still King: Finance Executives at Mid-Size Companies Focus on Maintaining Fiscal Discipline40% of Executives Say Lack of Bargaining Power with Customers, Suppliers is Greatest Obstacle to Improving Working-Capital Management, According to New American Express/CFO Research Report

NEW YORK,  March 13, 2012 -- 

Four years after the economic downturn, finance executives at mid-market companies are still focused on maintaining financial discipline and ensuring they have sufficient cash on hand. Executives acknowledge, however, that maintaining that level of discipline will be difficult as growth picks up, and cash is required for urgent spending and investment needs.

These are among the findings from a new American Express/CFO Research report on mid-size companies, "Cash and Working-Capital Discipline: CFOs at midsize firms face their top financial challenges," that is being released at this week's 19th annual CFO Leadership Summit. The report surveyed 323 senior finance executives at mid-size companies in the United States.

"Balancing working capital performance with competing spending needs and growth opportunities is a key challenge companies of all sizes face today," said Darryl Brown, President, Americas, Global Corporate Payments, American Express. "Mid-size companies have additional challenges, as they frequently negotiate for better payment terms with companies larger than they are, putting them at an obvious disadvantage. These companies need to be even smarter and more disciplined when it comes to cash flow management, and find new ways to maximize their working capital."

Strategies for Surviving Recession Create Foundation for Growth

The vast majority (85%) of finance executives at mid-size companies are more financially disciplined in the aftermath of the recent downturn.

• While over one-third of all respondents (34%) say that maintaining financial discipline will become easier in the coming year, more respondents (41%) say they expect it will become more difficult as financial and personnel resources are allocated to meet new growth prospects.

At the same time, finance executives recognize the value of maintaining fiscal discipline.

• Sixty-nine percent of respondents say that financial discipline will contribute to their competitive advantage over the next year – in contrast with 18% that cited this would limit their company's competitive advantage.

Challenges Threaten Working Capital Improvement

According to the survey, mid-market companies have stronger working-capital positions today than they had when the recession took hold. Two-thirds of respondents reported that their companies' days-working-capital (DWC) position today is better than it was three years ago.

However, challenges to improving working capital performance remain, partly as a result of mid-market firms deriving a large volume of business (57%) from companies that are bigger than they are. This imbalance affects their ability to negotiate better deals and payment terms.

• Lack of bargaining power with customers and/or suppliers was the biggest obstacle respondents said their company faced when trying to improve cash and working-capital management; 40% of respondents said it was their top obstacle, beating 11 other obstacles, including internal pressure to accept less favorable terms to close sales (34%) and lack of a shared organizational mandate to improve cash & working capital management (32%).
• In addition, 47% of finance executives agree that larger companies have used their bargaining power to force them to accept slower payments.
• Forty-four percent of respondents acknowledge that even when they hold a negotiating advantage, they have trouble requiring suppliers and vendors to accept changes in payment terms.

"The American Express network and billing cycle, along with our direct relationships with suppliers, helps level the playing field for mid-market companies," continued Brown. "With these advantages and our expert guidance, we help improve payment terms and gain additional negotiating leverage – benefits mid-market companies can't always get on their own."

For the full American Express/CFO Research report, click here or visitamericanexpress.com.

About the Survey
CFO Research Services surveyed 323 senior finance executives at mid-size companies across a wide range of industries in the United States. Company revenues ranged from $10 million to $500 million. The research program, conducted through an online survey of senior financial executives, was completed in January 2012.

About CFO Research Services
CFO Research Services is the sponsored research group of CFO Publishing LLC, which produces CFO magazine, CFO.com, and CFO Conferences. For more than 25 years, CFO Publishing has been a trusted source of insight into the issues that matter most to finance professionals.

CFO Publishing LLC, a portfolio company of Seguin Partners, is the leading business-to-business media brand focused on the information needs of senior finance executives. CFO Publishing's award-winning editorial content and loyal, influential audience make it a valued resource for its readers as well as an effective marketing partner for a wide range of blue-chip companies. CFO Publishing has long-standing relationships with more than a half-million finance executives.

About American Express Global Corporate Payments
Through its Global Corporate Payments group, American Express provides the Corporate Card, Corporate Purchasing Solutions, and other expense management services to mid-sized companies and large corporations worldwide.

American Express helps mid-size companies improve their cash flow and achieve their expense management goals in a number of ways, including:

• More Working Capital – The American Express billing cycle allows companies to pay suppliers more quickly while keeping their cash longer, optimizing working capital and improving supplier relationships.
• Greater Savings – The American Express suite of corporate payment solutions help companies consolidate and track spending across businesses and geographies to arm companies with additional negotiating leverage with suppliers, which ultimately drives savings to the bottom line.
• Expert Advice – American Express provides world-class relationship support through one of the largest dedicated client teams in the industry. The company offers customized analysis of client spending patterns and behaviors and expert advice on how to be more strategic about spending.

In the U.S., American Express is a leading issuer of commercial cards, serving more than 70% of the Fortune 500, as well as tens of thousands of mid-sized companies. American Express issues local-currency commercial cards in more than 40 countries, and International Dollar Corporate Cards in an additional 100+ countries. For more information, visit americanexpress.com/corporate.

Digital Records May Not Cut Health Costs

Excerpt from an article in

The New York Times

Tuesday March 06, 2012

Digital Records May Not Cut Health Costs, Study Cautions

By STEVE LOHR

Computerized patient records are unlikely to cut health care costs and may actually encourage doctors to order expensive tests more often, a study published on Monday concludes.

Industry experts have said that electronic health records could generate huge savings — as much as $80 billion a year, according to a RAND Corporation estimate. The promise of cost savings has been a major justification for billions of dollars in federal spending to encourage doctors to embrace digital health records.

But research published Monday in the journal Health Affairs found that doctors using computers to track tests, like X-rays and magnetic resonance imaging, ordered far more tests than doctors relying on paper records.

The use of costly image-taking tests has increased sharply in recent years. Many experts contend that electronic health records will help reduce unnecessary and duplicative tests by giving doctors more comprehensive and up-to-date information when making diagnoses.

The study showed, however, that doctors with computerized access to a patient’s previous image results ordered tests on 18 percent of the visits, while those without the tracking technology ordered tests on 12.9 percent of visits. That is a 40 percent higher rate of image testing by doctors using electronic technology instead of paper records.

The gap, according to the study, was even greater — a 70 percent higher rate — for more advanced and expensive image tests, including M.R.I. tests and CT, or computerized tomography, scans.

“Our research raises real concerns about whether health information technology is going to be the answer to reducing costs,” said Dr. Danny McCormick, the lead author of the study, who is an assistant professor at the Harvard Medical School and a member of the department of medicine at the Cambridge Health Alliance, a health system north of Boston.

Optimism About Year Ahead

News release from General Electric:

31 January 2012

Construction Equipment Dealers Optimistic About Year Ahead, GE Capital Survey Reveals

77% of respondents say the best time to increase inventory levels is first half

IRVING, TX – Construction equipment dealers are looking forward to improving trends in 2012 while acknowledging the challenges facing the industry, according to survey results released today by GE Capital, Dealer Finance.

Forty percent of respondents said they expect sales to increase 3%-5% this year, while 25% said they expect sales to increase 6%-8%. A full 77% said the best time to increase inventory is within the first half of 2012.

At the same time, 57% cited slack demand for new construction – both residential and commercial – as the biggest hurdle that construction equipment distributors have to overcome this year.

Slightly more than half of respondents said improvement in the U.S. economy will have the greatest impact on the construction industry. The other important factors affecting the industry are access to credit for end users (23%) and reauthorization of the federal highway spending bill (20%).

When asked what single category of construction equipment they believe will be in greatest demand this year, 37% cited earthmoving equipment and 23% cited specialty equipment such as pavers, compactors, drills, crushers and grinders.

The full survey results are available here:http://www.gelending.com/misc/Construction_Flash_Survey_Results_1-12.pdf

To stay on top of developing trends, participants can sign up for GE Capital’s Construction Industry Research Monitor here:http://www.americas.gecapital.com/insights-ideas/industry-research-monitor

“We’re dedicated to helping our customers be successful,” said Kristi Webb, commercial leader of GE Capital, Dealer Finance. “In addition to financing, we provide construction industry insights and expertise to help dealers and end-users tackle their biggest challenges so they can thrive in the year ahead.”

The Construction Equipment Distributor Survey of 65 respondents was conducted Jan. 18-19, 2012. Respondents included a variety of construction industry participants.

About GE Capital, Dealer FinanceGE Capital’s Dealer Finance business provides commercial leases and loans ranging from $5,000 to $25 million for the wholesale and retail financing of equipment to thousands in North America in over 12 industries. With long-term relationships and dedicated channel support, Dealer Finance works with small, medium and large enterprises as well as state and local governments. From web-based application submittals to online account management, its dedicated industry professionals bring knowledge and expertise to every relationship.

GE Capital offers consumers and businesses around the globe an array of financial products and services. For more information, visitwww.gecapital.com or follow company news via Twitter (@GECapital).

GE (NYSE: GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. For more information, visit the company's website at www.ge.com.