Caterers share risks as cost-plus declines
More and more catering contracts are being awarded on a commercial basis, according to a report on the contract catering industry.
The 1997 UK Contract Catering Industry survey found the number of cost-plus contracts - where all costs plus a management fee are passed on to the client - had shrunk from 7,637 in 1995 to 6,762 in 1996.
Over the four years to the end of 1996, the proportion of contracts that were cost-plus has fallen from 59% to 40%.
The overall number of contracts in the food service management industry has gone up by more than 25% in this same period, with many contracts switching into ones where the operator bears some of the risk.
These different contract types are defined as performance guarantee (which guarantees that costs will not rise above a certain level), fixed price (which establishes total costs within which the caterer will work) and partnership (where the client and caterer are partners in the operation and share the costs and revenues).
Despite the increase in the overall number of contracts operated, the total number of staff employed by contract caterers dropped from 97,765 to 92,663 during 1996.
This figure hides an even more dramatic plummeting of full-time posts in the industry as the part-time work-force increased by nearly 9% year-on-year.
Although average wages for those left in the industry went up, the total wage bill fell by 2.4%. Wage costs as a percentage of turnover fell slightly from 42.5% to 42%.
The total number of outlets in the business and industry (B&I) sector rose slightly in 1996 but the reductions in staff levels by big businesses meant the total volume of meals served fell.
The biggest growth by sector came in state education. There were 6,140 state school outlets compared with 4,653 outlets the previous year.
The 1997 UK Contract Catering Industry report, published by the British Hospitality Association and sponsored by Caterplan and Countrywide, costs £95. Contact the BHA for a copy, tel: 0171-404 7744.
