Low-spend trend to hit outside caterers

Competition in the outside catering sector is set to hot up with companies' budgets for corporate hospitality remaining static, while the number of events on offer is increasing.

The finding comes in an in-depth report into the sector, conducted for caterer Payne & Gunter by Anglia Polytechnic University, which analyses trends in corporate hospitality and looks at how companies decide how much to spend and what to spend it on.

The research concludes that, despite the end of recession, there is unlikely to be a return to the lavish corporate hospitality spending of the 1980s.

"Corporate hospitality spending is highly concentrated in the £10,000 to £100,000 range across all size of companies," says the report. "Companies expected to spend less in 1995 compared with 1990 and most respondents expected their corporate hospitality spending would remain static."

The study found dining was still the most popular corporate hospitality activity and would remain so in the future, although their popularity is set to decline by 3%.

The next most favoured activities for corporate entertaining are rugby, golf, concerts and cricket, with rugby in particular set to increase in popularity.

Companies that deal with outside catering firms said the main benefit was higher loyalty from their customers - 73% detailing this as why they use corporate hospitality.

More than half of the companies questioned also mentioned increased sales and winning new business as being benefits.

Roger de Pilkyngton, director of Payne & Gunter, said the company was surprised budgets for corporate hospitality were so subdued but he remained upbeat about the future.

"Companies are more discreet with their spending than in the 1980s and are wary of anything that could drag them into bad press about being fat cats," he said.

"It means creativity is the name of the game and we need to be innovative, try to do things in different ways and look at putting packages around new events that previously haven't been used for corporate hospitality."

lMr de Pilkyngton denounced as ridiculous rumours that Payne & Gunter might be acquired by Compass. "It is absolute rubbish that we are being taken over. We like being independent."

Similarly, Tony Roestenburg, managing director of Compass arm Letheby & Christopher, said the rumours were misplaced.