(last updated July 2019)
What has been happening in the catering sector
The catering industry as a whole is traditionally one of the first industries to feel the effects of a change in economic conditions. As a non-essential luxury, expenditure on outside catering suffers during periods of recession, when most people cut back on their spending. During these periods, demand for wedding catering is likely to be most resilient as people continue to get married, although consumers may opt for cheaper menus, do their own catering, and/or reduce the number of guests attending the celebration, while demand for dinner party catering is likely to suffer most.
For much of the 2000s there were fairly stable economic conditions and the industry benefited. There was reasonable growth in the catering sector, which was also boosted by strong interest in food. This interest was stimulated by:
- the large number of food and cookery programs promoting different types of cuisine
- greater exposure given to food in the national press
- cheaper worldwide travel, which has given more consumers access to food from different cultures
Unfortunately the economy took a sharp downturn in the late 2000s and remained very weak in the early 2010s. Food prices went up sharply during this period too. People reduced their spending on non-essentials and luxuries, while parties and events were scaled down and held less frequently. Businesses too looked to make economies, and corporate hospitality was one of the first things to be axed. There was still demand for good, well run catering businesses, but they had to work harder than ever to compete and succeed. Although the economy began to recover in 2013 and strengthened during the mid 2010s, businesses and individuals continued to be cautious with their spending and to seek out good value when they did spend their money.
As the economy started to improve from 2013 onwards, wages increased and people felt more secure in their jobs. This led to an increase in spending on entertainment, including expenditure on outside catering.
Although 2016 started well, consumer spending then started to weaken. The Brexit vote in June 2016 led to further economic uncertainty and a loss of confidence amongst both consumers and businesses, with a general tightening of purse strings as people waited to see how the economy would fare. The pound fell after the vote, increasing inflation and reducing consumers' spending power. The economy continued to perform weakly with low growth in 2017 and into 2018. Little change is forecast for the foreseeable future. It's expected that the food service sector will be less buoyant and profits are likely to suffer because of reduced sales and increased food costs due to the weakness of the pound. Other things that are likely to reduce profitability include the need to keep prices down to remain competitive, the increases in the minimum wage and living wage and the expected reduction in hospitality staff coming to the UK from the remaining EU countries, with managers forecasting higher wages and a skills shortage in the hospitality sector.
Despite the slowdown of the economy, there was some evidence that consumers were prepared to continue spending on leisure and experiences during 2017, boosting expenditure on things like landmark birthdays, engagements and weddings. However, low wage growth, rising inflation and the increasing burden of consumer debt saw pressure mounting in 2018 for those who had not already done so to rein in their spending.
The large supermarket chains have greatly expanded their ranges in recent years and foodstuffs that would have been rare in Britain five or ten years ago are now commonplace. The outside catering market has responded by offering more exotic ranges. The variety of dishes offered for knife and fork meals is greater, and meals are more imaginative and more like those found on a restaurant menu. The dinner party catering sector has become increasingly important in recent years as people have found themselves with less time on their hands to cook.
New allergy information regulations introduced at the end of 2014 mean that caterers must by law provide diners with information about any of 14 specified food allergens if these are used as ingredients.
Keeping up to date with developments
Joining a trade association is an excellent way of staying up to date with developments in your industry. The catering industry is well represented by several associations, including the British Hospitality Association (BHA). You can contact the BHA through their website.
The Institute of Hospitality (IoH) also represents the catering industry as a whole - find out more about the services and support they provide for their members on their website.
The Nationwide Caterers Association (NCASS) represents various different types of caterer, including outside catering specialists. They produce a quarterly newsletter for members. There's a huge amount of helpful advice, news and information on the NCASS website.
Subscribing to a trade journal is another excellent way of staying up to date. The weekly journal The Caterer contains a wealth of articles and features of interest to businesses in the food industry. Visit their website to find out more.
You can get a lot of useful information by visiting a trade show or exhibition for the catering industry. The Exhibitions UK website includes details of forthcoming exhibitions in many different industry sectors.