Contract caterers go for global deals
By Gaby Huddart
The UK's contract caterers are broadening their horizons and becoming increasingly ambitious to expand across international borders, according to this year's British Hospitality Association (BHA) contract catering survey.
The study, launched last week by the BHA's contract catering forum, found that in 1995 the overseas turnover of UK-based contract caterers leapt to 47% of their total turnover. The previous year, overseas business accounted for just 25% of the total.
"During the year, turnover from the overseas operations of food service management companies in the UK doubled from £528m the previous year to £1.097b. These figures reinforce the claim that the UK industry is fast becoming truly global," says the report.
"While the UK remains a major market for contractors - and is attracting foreign catering groups - global expansion presents enormous advantages to companies in terms of organisational structure, purchasing power and management opportunities," it adds.
The research also points to the public sector as an area of growth for contractors. The number of business and industry contracts grew by a modest 1%, while contracts with NHS Trusts grew by 8.4%.
The number of state education contracts grew by 354 last year to 4,957. This market now represents 31.7% of the total work of contract caterers, up from 2.8% in 1990.
Deals with the Ministry of Defence (MoD) are also proving lucrative. Nearly 400 MoD contracts have been won by private sector caterers, up from 267 a year ago and 68 in 1990.
The move into public sector work is forcing contractors to offer other services such as cleaning and housekeeping. The report says 20% of contracts are conditional upon the contractor providing a range of support services.
In terms of the types of contracts being negotiated, there is a move away from traditional cost-plus. In the past three years, the number of cost-plus contracts has fallen from 59% of the total to 41%.
Bob Cotton, chairman of the contract catering forum, explained: "There has been a significant change in the way we all do business. Now more than 50% of our contracts are either fixed-price, concession or guaranteed-cost."
For a copy of the 1996 UK Contract Catering Industry, priced £50, write to Steven King, BHA, Queen's House, 55-56 Lincoln's Inn Fields, London WC2A 3BH. Leaflets summarising the research are available free.