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Business and Industry Catering - UK - October 2010

ISSUES IN THE MARKET
Key issues
Definition
Terminology
FUTURE OPPORTUNITIES
Trend: Over-optioned consumer
Trend: Tug of war
MARKET IN BRIEF
Challenging times for workplace caterers
Reduced headcount has an impact on meals served
Non-catering services continue to expand
Contract caterers innovate to meet consumers’ high street expectations
BEYOND COST: MARKETING INITIATIVES EMPLOYED BY CONTRACT CATERERS
Key points
Caterers are operating in a cost-control culture
What ‘else’ can you bring to the table?
The service mix
First and foremost: Cost savings for all stakeholders
Growth of FSM – widening the service portfolio
Be innovative
Show commitment to sustainability
High street brands are a crowd-puller
Not just words, must show progress towards healthy eating
Key points
Challenging trading conditions
Coalition government focused on deficit reduction
Unemployment is the single most influential factor
Figure 1: UK monthly unemployment rate, aged 16 and over (seasonally adjusted), by gender, 2005-10
Spending confidence continues to affect eating out
Figure 2: GDP, PDI, consumer expenditure and savings, at current prices, 2005-15
Young target population enjoy eating out
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
COMPETITIVE CONTEXT
Key points
B&I accounts for one in three meals served
Figure 3: Competitive context of the contract catering market, 2008-09
Figure 4: Growth in meals and outlets, by share, 2008-09
Shrinkage due to contract losses and hospitality cutbacks
Figure 5: Total number of outlets in business and industry, 1990-2009
How attractive is the business and industry sector to contract caterers?
Combating the high street ‘meal deal’
Figure 6: Performance of competing markets, market sizes, 2005-09
Knowing your enemy
WHO’S INNOVATING?
Key points
Caterers get involved to freshen up the in-house catering offer
£2,000 kitchen makeover; CH&Co invests in ‘farmers’ market’ style aesthetics to tempt diners
Elior UK makes fresh produce more visible
Compass helps QVC create a more welcoming environment for staff
Celebrity presence breathes new life into corporate dining
Key points
Fewer staff, fewer outlets = higher turnover?
Trends in turnover
Figure 7: The business and industry contract catering market, 2005-15
Reason for optimism
Competitors battle it out whether small or large-scale operations
Caterers toughen up to nil-subsidy and unprofitable tenders
Future outlook
Factors used in the forecast
SEGMENT PERFORMANCE
Key points
Outlet numbers shrink to pre-2002 levels
Figure 8: Total number of business and industry outlets served by contract caterers, 1991-2009
B&I sees drastic drop in number of meals served in 2009
Figure 9: Number of meals in the business and industry market, 1991-2009
Non-catering offers a buffer
COMPANIES AND SERVICES
Aramark
Figure 10: Financial performance of Aramark Limited, 2008 and 2009
BaxterStorey
Figure 11: Financial performance of BaxterStorey Limited, 2008 and 2009
CH&Co
Figure 12: Financial performance of Charlton House Limited, 2008 and 2009
Compass Group (Eurest Services)
Figure 13: Financial performance of Compass Group PLC, 2008 and 2009
Figure 14: Six months’ financial performance of Compass Group PLC, 2009 and 2010
Elior
Figure 15: Financial performance of Elior UK Limited, 2008 and 2009
Initial Catering
Figure 16: Financial performance of Initial Catering Services Limited, 2008 and 2009
Sodexo
Figure 17: Financial performance of Sodexo Limited, 2008 and 2009
Figure 18: Financial performance for first six months of Sodexo Limited, 2009 and 2010
EMPLOYEE LUNCH PREFERENCES – PURCHASE
Key points
Figure 19: Outlets used for buying lunch and frequency of visits, July 2010
Canteen food quite far down the lunch chain
Figure 20: Demographic pattern of those who buy lunch in a work canteen, any frequency, according to above-/below-average responses, July 2010
Consumers are spoilt for choice
BYO butties
Failing to strike a chord with female employees
Figure 21: Outlets used for buying lunch by any frequency, according to above-/below-average responses, by gender, July 2010
Life’s too short to eat in the same place every day
Figure 22: Repertoire of outlets used for buying lunch, July 2010
EMPLOYEE LUNCH PREFERENCES – CONSUMPTION
Key points
Figure 23: Lunch purchasing habits at work, July 2010
Sedentary lifestyles and lunch hours
EMPLOYEE ATTITUDES TOWARDS LUNCH CHOICES
Key points
Figure 24: Statements on eating lunch during the week on workdays, July 2010
Healthy eating gets the thumbs up from canteen users
Disagreement over calorie counting
Breaking lunch habits
Figure 25: Statements on eating lunch during the week on workdays, by most popular outlets used for buying lunch, July 2010
Majority are feeling the pinch
Figure 26: Agreement with the statement ‘I have cut back on spending on lunch in the last year’, by age group, July 2010
APPENDIX – BROADER MARKET ENVIRONMENT
Figure 27: Trends in the age structure of the UK population, by gender, 2005-15
APPENDIX – COMPETITIVE CONTEXT
Figure 28: No. of outlets, by share, 2009
Figure 29: No. of meals served per outlet, 2009
Figure 30: Competitive context of the contract catering market, 2009
Figure 31: Competitive context of the contract catering market, 2009
APPENDIX – EMPLOYEE LUNCH PREFERENCES – PURCHASE
Figure 32: Most popular outlets used for buying lunch (any usage), by demographics, July 2010
Figure 33: Next most popular outlets used for buying lunch (any usage), by demographics, July 2010
Figure 34: Outlets used for buying lunch, by repertoire of outlets used for buying lunch, July 2010
Figure 35: Repertoire of outlets used for buying lunch (any usage), by demographics, July 2010
APPENDIX – EMPLOYEE ATTITUDES TOWARDS LUNCH CHOICES
Figure 36: Lunch purchasing habits at work, by most popular outlets used for buying lunch (any usage), July 2010
Figure 37: Lunch purchasing habits at work, by next most popular outlets used for buying lunch (any usage), July 2010
Figure 38: Most popular lunch purchasing habits at work, by demographics, July 2010
Figure 39: Next most popular lunch purchasing habits at work, by demographics, July 2010
APPENDIX – EMPLOYEE ATTITUDES TOWARDS LUNCH CHOICES
Figure 40: Statements on eating lunch during the week on workdays, by demographics, July 2010
Figure 41: Statements on eating lunch during the week on workdays, by demographics, July 2010
Figure 42: Statements on eating lunch during the week on workdays, by demographics, July 2010
Figure 43: Statements on eating lunch during the week on workdays, by demographics, July 2010
Figure 44: Statements on eating lunch during the week on workdays, by demographics, July 2010
Figure 45: Statements on eating lunch during the week on workdays, by demographics, July 2010
Figure 46: Statements on eating lunch during the week on workdays, by demographics, July 2010
Figure 47: Statements on eating lunch during the week on workdays, by demographics, July 2010
Figure 48: Statements on eating lunch during the week on workdays, by demographics, July 2010
Figure 49: Statements on eating lunch during the week on workdays, by most popular outlets used for buying lunch (any usage), July 2010
Figure 50: Statements on eating lunch during the week on workdays, by next most popular outlets used for buying lunch (any usage), July 2010
Figure 51: Statements on eating lunch during the week on workdays, by most popular lunch purchasing habits at work, July 2010
Figure 52: Statements on eating lunch during the week on workdays, by next most popular lunch purchasing habits at work, July 2010
Figure 53: Statements on eating lunch during the week on workdays, by repertoire of outlets used for buying lunch and frequency of visits, July 2010

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