Contract caterers beat inflation with 7% growth in third quarter of 2024 – London Business News | Londonlovesbusiness.com

Sales at Britain’s leading contract caterers grew by 7% year-on-year in the third quarter of 2024, the latest Contract Catering Tracker from CGA by NIQ and Bidfood reveals.

It means caterers have now increased sales for 14 quarters in a row. The figure was slightly behind the rate of 10% in the second quarter of this year, but MAT growth—for sales over the last 12 months compared to the previous 12 months—has reached 9%.

The third quarter also brought a small rise in the number of outlets served by contract caterers. After a steady downward trend since the start of the COVID-19 pandemic, sites increased by 1% year-on-year.

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The Contract Catering Tracker from CGA and Bidfood aggregates sales from leading operators to provide monthly reports with year-on-year analysis. It offers businesses a valuable benchmarking tool to measure performance across various metrics and market groupings, and participants in the Tracker receive additional analysis in return for their contributions.

Karl Chessell, director – hospitality operators and food, EMEA at CGA by NIQ, said, “Fourteen consecutive quarters of growth is an outstanding achievement by the contract catering sector.

“It is particularly impressive in light of the severe inflationary pressures that it has faced in the last few years and demonstrates the strong underlying demand for its services across both the public and private sectors. Those cost challenges are unfortunately going to intensify following the Autumn Budget, which risks compromising the major economic contributions of caterers.”

Debra Morrell, business development controller for B&I at Bidfood, said, “We’re pleased to see another strong quarter of growth in contract catering, and for the first time, a turnaround in the number of outlets.

“However, whilst we’re seeing a positive picture of a resilient and agile sector, having clawed its way back after significant challenges faced over the last few years, it’s hard to retain the same positivity about the outlook going forwards following the Autumn budget. The additional cost burdens imposed on businesses will no doubt reverse some of these trends, and could potentially result in closures and job losses across the sector as well as a spike in inflation, additional pressure on public sector budgets and impacts on consumer spending.

“The compounded effect of changes in NI, on top of the minimum wage increase and employment rights bill, and the cut in business rates relief will be hard for all businesses to ensure, particularly those in a service sector that is a key employer and will have a devastating effect on many SMEs. We will be adding our voice to that of UKHospitality in raising our concerns with government.”

Kate Nicholls, chief executive of UKHospitality, said, “We are once again seeing positive sales and growth figures from contract caterers, with sales increases for more than three years. However, the recent changes to employer National Insurance contributions put all of that positivity at risk in April.

“Contract caterers deliver a vital public service to our schools, hospitals, visitor attractions and many more, and we need urgent action to mitigate the impact of these increases.”