Why There's Confidence
Why There's Confidence (BHA April '04)
Linda Halliday of Wilson Storey Halliday, and the chair of the BHA's Food and Service Management Forum, offers her insight into the findings for the British Hospitality Association (BHA) 2004 survey.
If the strong growth in recent years of the food and service management industry was checked, though not reversed, in 2003, the responses to this year's survey indicate that there remains huge confidence in its future on the part of companies.
At a time when other sectors of the hospitality industry suffered severe setbacks during the year, the contracted sector increased turnover by 2.4 per cent and provided marginally more meals, with a reduced number of outlets. In other words, sales improved.
At the same time, the number of support services increased by 19 per cent, proving that expansion outside catering also remains a viable and profitable market for food and service management companies. When set against the continuing rationalisation in manufacturing industry, which inevitably still leads to office and factory closures, this year's performance is quite an achievement.
The main driver of the industry's continuing expansion is the commercialisation of food and service management, which is leading companies in the industry to adopt a sales-led rather than product-led approach.
This is partly driven by client and customer demand. Clients, more than ever, are anxious to reduce the space allocated to their catering services and wish to reduce the subsidy; customers, meanwhile, are experiencing lifestyle changes in eating-out in the High Street, and are moving towards lighter 'grab and go' meals, with an increasing emphasis on healthy options.
These trends are complementary, not competitive. They have encouraged catering companies to look at ways in which the traditional cooked meal can be supplemented or even replaced with snack meals and beverages that can be consumed away from the point of sale.
The trend towards snack meals has gained more ground, taking an estimated 65-70 per cent of the market, with 30-35% of meals plated.
To the caterer's advantage, snack meals are the preferred choice of their customers; it makes good marketing sense to provide what the customer wants.
But there are other advantages. Snack meals yield higher margins and they require fewer staff with fewer traditional culinary skills. Customer-facing skills, however, are commensurately more important as food outlets become more dependent for their success on attracting and retaining customers through good service in order to maximise revenue.
As a result, as much emphasis is now placed on the design and ambience of food outlets, and on the merchandising of the food items being sold, as on the quality of the food itself.
British Hospitality Association