23rd Sep 2011 - 00:00
Abstract
The business outlook for contract caterers shows cause for both optimism and pessimism, according to BaxterStorey chief executive Noel Mahony.
"Companies do seem to have a bit more money now and corporate spending is rising.
"They're not shouting about it, but having cut back over the last couple of years they've realised it makes sense for the business now to put more in the budget for this."
With a significant stake in the business and industry (B&I) sector, this is good news for BaxterStorey.
But at the same spending in the public sector was being reduced.
"That means that any operator with contracts in that sector is struggling and may well be for a while yet."
Mahony was speaking at the Horizons breakfast briefing at Barbers Surgeons Hall in London today, an event dedicated to exploring the theme 'Beyond Uncertainty'.
Philip Shaw of Investec told the invited catering and hospitality business leaders that despite appearances the UK economy was not doing too badly.
"Officially it has grown 2.5% since the deepest trough of the recession, 350,000 new jobs have been created and transactions in the housing market are up, so the recovery denial story doesn't hold water."
He conceded the economic recovery had lost momentum, but said a 'double dip' recession was unlikely and that realistically the UK could look forward to one or two years of slow growth.
Peter Backman of Horizons said the latest foodservice industry data showed it was a relatively stable market but in slight decline.
"Food and beverage sales have been flat, but with inflation that amounts to a real decline. Similarly, inflation and the VAT rise alone account for any growth seen in the market."
He said operators would continue to feel the squeeze on margins due to the narrowing difference between the costs of the food they buy and the serving price customers are prepared to pay.
And he added that vouchers schemes provided a useful economic indicator.
"Vouchers are a fact of life for High Street chains, though no-one knows for how long. The number of vouchers declined earlier in the year and we thought they were going away. But their use is growing again."