Strategic Analytical Review of the Catering

Sector

James Guild

Oliver Benbow

Gareth Williams

Claire Ryder

Lisa Westwood

Bournemouth UniversityBournemouth UniversityBAIHMBAIHM

Business StrategyBusiness Strategy

Introduction

Catering sector consists of:- Restaurants- Takeaways/Café’s- Pubs/Bars- Hotels

Each sub-sector caters for a similar segment of the entire marketInvesting in the sector?

Introduction - statistics

Restaurants take up 68% of the eating out market

Market value reached an estimated 21.8 billion pounds in 2000

This indicates a market growth of 6% between 1995 and 2000

2 in 10 adults are choosing to eat out more often (leisure intelligence, 2001)

Restaurants- Fine Dining

- Independent /Privately owned

- Brassiere

- Ethnic

- A la Carte

- Table d’hote

- Themed/Branded Restaurants

Analysed Sector - Restaurants

Reason for analysing Restaurants:Market Share

Restaurants Pubs/Bars

HotelsConvenience

foods

Roadside Catering

High Low

Low

Growth

Boston Consultancy Group Model

Trends In The Catering Sector

People want value for money

More leisure time

Social trends towards a healthier lifestyle

Increase in PDI and consumer expenditure

Increase PDI and Consumer Expenditure Trends 1994-1999

0

100

200

300

400

500

600

700

1994 1995 1996 1997 1998 1999

Year

£B

n

Consumer Expenditure

PDI

Increase in eating out

Trends In The Catering Industry

Inbound tourism

0

5000

10000

15000

20000

25000

30000

Spending(£000) 11763 12290 12244 12671 12498 12780 10500

Visits(000) 23537 25163 25515 25747 25934 25192 20250

1995 1996 1997 1998 1999 2000 2001

Direct- Takeaways/Café’s

- Supermarket/Convenience Food

- Pubs

- Hotels

- Contract Catering i.e. in store

Competitors

Competitors

Indirect- Theme parks

- Leisure centres

- Shopping centres

- Cinemas

- Hobbies

(DEEPLIST) Factors Influencing The Catering Sector

Demographic- American demography of “large portions”- Woman from a large % of customers to

restaurants in the daytime, however equal split during the evening

- Consumers continue to seek value for money, with an AVG spend per capita of £389

- The UK public with the help of technology are more knowledgeable regarding foreign/ branded food

(DEEPLIST) Factors Influencing The Catering Sector

Economic- Possible predicted “recession”- Current base rate lowest ever for decades- Food prices remain constant in the industry,

following BSC and foot and mouth- Economic cycles

(DEEPLIST) Factors Influencing The Catering Sector

Ecological- Consideration towards the use of recyclable

goods- Possibility of extra operating expenses due

to environmental friendliness- Foot and mouth

(DEEPLIST) Factors Influencing The Catering Sector

Political- Impact of current worldwide political unrest- Implications of the Euro on the future

economic position within the UK- Policies on subsidisation

(DEEPLIST) Factors Influencing The Catering Sector

Legal- Legislation regarding increased minimum

wage- European Union working time directive, 48

hour working week- Food and Safety Act 1995 - Disability Discrimination Act (Updated)

(DEEPLIST) Factors Influencing The Catering Sector

Informational- Increased access to multimedia systems- Virtual tours- Consumers choice to access and

research specified eating requirements

Social

- Competition for leisure time

- More women are working

- Family orientation values (cocooning)

- Large target market

- Consumers are comfortable with established high street branded restaurants

(DEEPLIST) Factors Influencing The Catering Sector

(DEEPLIST) Factors Influencing The Catering Sector

Technological

- Cook-chill methods are on the increase allowing for a less skilled workforce to be employed

- Growing use of internet

- More consumer awareness via media publications

Risk Factors For Market Entry

Saturated market

Predicted recession

High start up costs

Increased home leisure activities

Strict legislative factors

Ego of founder

Uncertainty of foreign expenditure

1998 TOURIST EXPENDITURE IN THE UK

OTHER57%

HOLLAND3%

AUSTRALIA3%

USA20% GERMANY

7%

FRANCE6%

ITALY4%

Future Trends In The Catering Industry

Systematically increasing Disposable income

Indirect competitors expected to gain in popularity in the next 4 years (i.e.theme parks)

Social trends towards a healthier lifestyle

Main target market (55+) is growing in age and numbers

Main Market Audience

Recommendations

Branding/theme of product

- possible franchise affiliation

Strive to offer value for money

Reserve of adequate capital

Use celebrity image to produce image of quality

Develop effective marketing strategies

- target correct and emerging markets

Demographic location/infrastructure

Know your legislation

Effective and efficient use of resources

Recommendations

Conclusion

The next 5 yrs will see an uncertain economicclimate, worldwide. However current trendsindicate a growth in eating establishments,particularly branded outlets. People willcontinue to eat out,as it is now a characteristicof the population!