Cost-plus contracts bite the dust

Contract caterers will have abandoned the cost-plus contract within the next five years, predicts the latest annual survey of the sector by the British Hospitality Association (BHA).

Bob Cotton, chairman of the BHA's Contract Catering Forum, said cost-plus contracts - where all costs plus a management fee are charged to the client - were under threat because of the increasing commercialisation of contracts.

"The move away from cost-plus has happened rapidly and now just over half of all contracts are something other than cost-plus," he added.

The 1997 UK Contract Catering Industry Survey shows a 13% reduction in the number of cost-plus contracts during last year. But there was a 30% increase in fixed-price and performance guarantee contracts where the caterer bears some of the risk of the catering operation.

Mr Cotton claimed contract catering outlets were now seen as retail opportunities.