2007 continued the trend away from cost plus/management fee-based contracts towards fixed price/performance guarantee contracts.
This shift over the past few years means that more than 70% of the foodservice market is now commercially based.
Cost-plus contracts (in which the client is billed for the cost of the operation, plus a management fee) have contracted from more than 60% of the total market in 1994 to just 27.6% in 2007.
Contract caterers invested around £25m in their outlets during 2007, the same as in 2006. In almost every case, the contract was dependent on the investment, underlining the commercial pressure increasingly being exerted by clients.
Around 10% of this investment was made by smaller companies.
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These facts and figures are reported in the
Food and Service Management Survey 2008, published by the
British Hospitality Association. The report is available for £50 as a hard copy or for £35 as a PDF file.
More facts and figures from the Food and Service Management Survey
UK contract catering turnover >>
Number of meals served by UK contract caterers >>
Key ratios in contract catering >>
Number of employees in UK contract catering market >>
Structure of the UK contract catering market >>
Number of contracts followed (in brackets) by their percentage share of total contracts
| |
Cost Plus and management fee contracts |
Fixed price and performance guarantee contracts |
Profit and loss, concession and total risk contracts |
Total contracts
ψ |
| 2007 |
4,855 (27.6%) |
12,035 (68.4%) |
713 (4%) |
17,603 |
| 2006 |
4,845 (27.8%) |
11,945 (68.8%) |
583 (3.4%) |
17,373 |
| 2005^ |
5,182 (30.5%) |
11,212 (66.1%) |
575 (3.4%) |
16,969 |
| 2004 |
4,898 (27.2%) |
9,335 (51.8%) |
3,685 (20.4%) |
18,028** |
| 2002 |
5,585 (29.4%) |
10,091(53.2%) |
3,250 (17.1%) |
18,979* |
ψ The figures exclude 118 contracts in 2005, 36 in 2006, and 174 in 2007
^ Adusted to take account of Compass's sale of Select Service Partners in 2006. Excludes 118 purchasing contracts
** includes 55 purchasing contracts
* includes 53 purchasing contracts
Definition of terms
Cost Plus/management fee: The client is billed for the cost of the operation plus a management fee
Fixed price/performance guarantee: The client agrees a total subsidy and costs cannot rise above that figure
Profit and loss concession contracts and total risk contracts: The caterer and the client share the profit (or the loss); in total risk contracts the caterer invests in the facility and earns all the revenues.
