The UK Foodservice Operators' Business Sentiments and ... - SP.pdfJohn Carpenter House, 7 Carmelite Street, London, EC4Y 0BS, United Kingdom, Tel: +44 (0) 20 7936 6400, Fax: +44 (0)

www.canadean.com

The UK Foodservice Operators' Business Sentiments and Spending

Priorities 2013

www.canadean-foodservice.com Reference code: FS2160PR Published: March 2013

John Carpenter House, 7 Carmelite Street, London, EC4Y 0BS, United Kingdom, Tel: +44 (0) 20 7936 6400, Fax: +44 (0) 20 7366 6813

©Canadean. This product is licensed and is not to be photocopied. Reference code: FS2160PR Published: March 2013

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TABLE OF CONTENTS

1 Introduction ........................................................................................................................... 8

1.1 What is this report about? ................................................................................................................. 8

1.2 Definitions ........................................................................................................................................ 8

1.3 Methodology ..................................................................................................................................... 9

1.4 Profile of survey respondents ......................................................................................................... 11

2 Executive Summary ............................................................................................................ 14

3 UK Foodservice Industry Channel Dynamics ................................................................... 17

3.1 Revenue Growth Expectations in the UK Foodservice Industry for 2013 ........................................ 18

3.1.1 Revenue growth expectations – comparison between UK profit sector foodservice channels ................ 18

3.1.2 Revenue growth expectations in UK profit sector foodservice channels .................................................. 19

3.1.3 Revenue growth expectations by senior level respondents ...................................................................... 22

3.1.4 Revenue growth expectations by company turnover – UK profit sector foodservice channels ................ 24

3.1.5 Budget growth expectations in UK cost sector foodservice channels ...................................................... 25

3.1.6 Budget growth expectations by company turnover – UK cost sector foodservice channels .................... 27

3.1.7 Revenue growth expectations by UK foodservice industry suppliers ....................................................... 28

3.2 Profitability Expectations in the UK Foodservice Industry ............................................................... 29

3.2.1 Profitability expectations in UK foodservice profit sector channels ........................................................... 29

3.2.2 Profitability expectations by company turnover – UK profit sector foodservice channels ......................... 33

3.2.3 Change in profitability expectations by suppliers ...................................................................................... 35

3.2.4 Change in profitability expectations by frequency of customer footfall – UK profit sector foodservice

channels ................................................................................................................................................................ 36

3.3 Customer Footfall Outlook by UK Foodservice Channels ............................................................... 37

3.3.1 Customer footfall outlook in UK profit sector foodservice channels .......................................................... 37

3.3.2 Customer footfall outlook in UK cost sector foodservice channels ........................................................... 43

3.4 Key Drivers of Customer Demand in UK Foodservice Channels..................................................... 45

3.4.1 Key drivers of customer demand in UK foodservice sectors – a comparison between 2012 and 2013

responses .............................................................................................................................................................. 45

3.4.2 Key drivers of customer demand in UK foodservice sectors .................................................................... 46

3.4.3 Key drivers of customer demand in UK foodservice channels ................................................................. 51

4 The UK Foodservice Operators' Concerns and Trends ................................................... 52

4.1 Leading Business Concerns for Foodservice Operators in 2013 .................................................... 53

4.1.1 Comparison of leading business concerns in UK foodservice, 2011–2013 .............................................. 53

4.1.2 Leading business concerns in UK foodservice channels .......................................................................... 55

4.1.3 Leading business concerns by suppliers .................................................................................................. 56

4.1.4 Leading business concerns in UK foodservice channels by company turnover ....................................... 57

4.2 Calorie Labelling Concerns in the UK Foodservice Industry ........................................................... 58


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4.2.1 Calorie labelling concerns in UK foodservice sectors ............................................................................... 58

4.2.2 Calorie labelling concerns in UK foodservice channels ............................................................................ 58

4.2.3 Calorie labelling concerns in UK foodservice channels by company turnover ......................................... 60

4.3 Customer Satisfaction Parameters in the UK Foodservice Industry ................................................ 61

4.3.1 Customer satisfaction parameters by UK profit sector .............................................................................. 61

4.3.2 Customer satisfaction parameters by UK cost sector ............................................................................... 63

4.3.3 Customer satisfaction parameters by UK foodservice channels .............................................................. 65

4.4 Food and Beverage Trends in UK Foodservice Channels .............................................................. 66

4.4.1 Food and beverage trends in UK profit sector foodservice channels ....................................................... 66

4.4.2 Food and beverage trends in UK cost sector foodservice channels ......................................................... 69

5 Promotions and Price Trends in the UK Foodservice Industry ....................................... 71

5.1 Key Promotion Activities in UK Foodservice Industry...................................................................... 72

5.1.1 Key promotion activities in UK profit sector............................................................................................... 72

5.1.2 Key promotion activities in UK cost sector ................................................................................................ 74

5.1.3 Key promotion activities in UK foodservice channels ............................................................................... 75

5.2 Expected Changes in Food and Beverage Prices in the UK Foodservice Industry ......................... 76

5.2.1 Expected change in food and beverage prices by UK foodservice sector ................................................ 76

5.2.2 Expected change in food and beverage prices by UK foodservice channels ........................................... 78

5.2.3 Expected change in food and beverage prices by suppliers .................................................................... 79

5.2.4 Expected change in food and beverage prices by company turnover ...................................................... 80

5.3 Supplier Selection Criteria in the UK Foodservice Industry ............................................................. 81

5.3.1 Supplier selection criteria by UK foodservice sector ................................................................................. 81

5.3.2 Supplier selection criteria by UK foodservice channels ............................................................................ 84

5.4 UK Foodservice Industry Supplier Pricing Trends ........................................................................... 85

5.4.1 Supplier pricing trends in UK profit sector foodservice channels .............................................................. 85

5.4.2 Supplier pricing trends in UK cost sector foodservice channels ............................................................... 87

6 UK Foodservice Operators' Spend Activity ...................................................................... 88

6.1 Capital Expenditure Dynamics in the UK Foodservice Industry ...................................................... 89

6.1.1 Capital expenditure dynamics in UK foodservice profit sector, 2011–2013 .............................................. 89

6.1.2 Capital expenditure dynamics in UK foodservice cost sector, 2011–2013 ............................................... 93

6.1.3 Expectations of capital expenditure by UK foodservice channels ............................................................ 95

6.1.4 Expectations of capital expenditure by suppliers ...................................................................................... 96

6.2 Change in Expenditure on Products and Services in the UK Foodservice Industry ......................... 97

6.2.1 Change in expenditure on products and services by UK profit sector foodservice channels ................... 97

6.2.2 Change in expenditure on products and services by UK cost sector foodservice channels .................. 102

6.3 Recruitment Activities in the UK Foodservice Industry 2013 ......................................................... 106

6.3.1 Recruitment activities by UK foodservice sectors, 2011–2013 ............................................................... 106

6.3.2 Recruitment activities in UK foodservice channels by company turnover .............................................. 108

7 Marketing Trends and Strategies in the UK Foodservice Industry ............................... 110


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7.1 Forecasted Changes in Marketing Expenditure ............................................................................ 111

7.1.1 Comparison of forecasted changes in marketing expenditure by foodservice operators, 2011–2013 ... 111

7.1.2 Forecasted changes in marketing expenditure by suppliers ................................................................... 114

7.2 Leading Sources for New Product Ideas in the UK Foodservice Industry ..................................... 116

7.2.1 Leading sources for new product ideas by UK foodservice profit sectors .............................................. 116

7.2.2 Leading sources for new product ideas by UK foodservice cost sectors ................................................ 118

7.2.3 Leading sources for new product ideas by UK foodservice channels .................................................... 119

7.2.4 Leading sources for new product ideas by suppliers .............................................................................. 121

7.3 Key Marketing and Promotional Channels in the UK Foodservice Industry ................................... 122

7.3.1 Key marketing and promotional channels in UK profit sector foodservice channels .............................. 122

7.3.2 Key marketing and promotional channels in UK cost sector foodservice channels ............................... 126

7.3.3 Key marketing and promotional channels by suppliers ........................................................................... 127

8 Appendix ............................................................................................................................ 128

8.1 Survey Results – Closed Questions ............................................................................................. 128

8.2 About Canadean .......................................................................................................................... 148

8.3 Disclaimer .................................................................................................................................... 148


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LIST OF FIGURES

Figure 1: Comparison of Revenue Growth Optimism in UK Profit Sector Foodservice Channels (%), 2013 ............................................................. 19 Figure 2: Revenue Growth Optimism in UK Foodservice Industry by Senior Level Respondents (%), 2013 ............................................................. 23 Figure 3: Revenue Growth Optimism in UK Profit Sector Foodservice Channels by Company Turnover (%), 2013 ................................................. 25 Figure 4: Budget Growth Expectations in UK Cost Sector Foodservice Channels (%), 2011–2013 .......................................................................... 26 Figure 5: Budget Growth Expectations in the UK Cost Sector Foodservice Channels by Company Turnover (%), 2013 .......................................... 27 Figure 6: Revenue Growth Optimism in the UK Foodservice Industry by Supplier Respondents (%), 2013 .............................................................. 28 Figure 7: Profitability Expectations in UK Profit Sector Foodservice Channels (%), 2013 ......................................................................................... 33 Figure 8: Profitability Expectations in UK Profit Sector Foodservice Channels by Company Turnover (%), 2013 ..................................................... 34 Figure 9: Profitability Expectations by Foodservice Industry Suppliers (%), 2013 ..................................................................................................... 35 Figure 10: Comparison of Customer Footfall in the UK Accommodation Foodservice Channel (%), H2 2012 vs. H1 2013....................................... 38 Figure 11: Comparison of Customer Footfall in the UK Catering Foodservice Channel (%), H2 2012 vs. H1 2013 .................................................. 40 Figure 12: Comparison of Customer Footfall in the UK Pubs, Leisure and Travel Foodservice Channel (%), H2 2012 vs. H1 2013 ......................... 41 Figure 13: Comparison of Customer Footfall in the UK Restaurants Foodservice Channel (%), H2 2012 vs. H1 2013 ............................................. 42 Figure 14: Comparison of Customer Footfall in the UK Education Foodservice Channel (%), H2 2012 vs. H1 2013 ................................................ 43 Figure 15: Comparison of Customer Footfall in the UK Other Cost Sector Foodservice Channel (%), H2 2012 vs. H1 2013 .................................... 44 Figure 16: Key Drivers of Customer Demand in UK Profit Sector Foodservice Channels (%), 2013 ......................................................................... 48 Figure 17: Key Drivers of Customer Demand in UK Cost Sector Foodservice Channels (%), 2013 .......................................................................... 50 Figure 18: Comparison of Leading Business Concerns in UK Foodservice Channels (%), 2013 .............................................................................. 54 Figure 19: Leading Business Concerns by UK Foodservice Industry Suppliers (%), 2013........................................................................................ 56 Figure 20: Calorie Labelling Concerns in UK Foodservice Channels (%), 2013 ....................................................................................................... 60 Figure 21: Customer Satisfaction Parameters in UK Profit Sector Foodservice (%), 2013........................................................................................ 63 Figure 22: Customer Satisfaction Parameters in UK Cost Sector Foodservice Channels (%), 2013 ......................................................................... 64 Figure 23: Key Promotion Activities in UK Profit Sector Foodservice Channels (%), 2013 ....................................................................................... 73 Figure 24: Key Promotion Activities in UK Cost Sector Foodservice Channels (%), 2013 ........................................................................................ 74 Figure 25: Comparison of Significant Promotion Activities in UK Foodservice Profit and Cost Sector Channels (%), 2013 ..................................... 75 Figure 26: Expected Change in Food and Beverage Prices by UK Foodservice Sectors (%), 2013 ......................................................................... 77 Figure 27: Expected Change in Food and Beverage Prices by UK Foodservice Channels (%), 2013 ...................................................................... 78 Figure 28: Expected Change in Food and Beverage Prices by UK Foodservice Industry Suppliers (%), 2013 ......................................................... 79 Figure 29: Expected Change in Food and Beverage Prices across UK Foodservice Channels by Company Turnover (%), 2013 ............................ 80 Figure 30: Comparison of Supplier Selection Criteria by UK Foodservice Industry Profit and Cost Sector (%), 2013 ............................................... 83 Figure 31: Supplier Pricing Trends in UK Profit Sector Foodservice Channels (%), 2013 ......................................................................................... 86 Figure 32: Supplier Pricing Trends by UK Cost Sector Foodservice Channels (%), 2013 ......................................................................................... 87 Figure 33: Expectations of Capital Expenditure by UK Foodservice Industry Profit Sector (%), 2013 ....................................................................... 92 Figure 34: Expectations of Capital Expenditure by UK Foodservice Industry Cost Sector (%), 2013 ........................................................................ 95 Figure 35: Change in Expenditure on Products and Services by Accommodation Channel (%), 2013 ..................................................................... 98 Figure 36: Change in Expenditure on Products and Services by Pubs, Leisure and Travel Channel (%), 2013...................................................... 100 Figure 37: Change in Expenditure on Products and Services by Education Channel (%), 2013 ............................................................................. 103 Figure 38: Change in Expenditure on Products and Services by Other Cost Sector Channels (%), 2013 ............................................................... 105 Figure 39: Recruitment Activities in UK Profit and Cost Sector Foodservice Channels (%), 2011–2013 ................................................................. 107 Figure 40: Recruitment Activities in UK Foodservice Channels by Company Turnover (%), 2013 .......................................................................... 109 Figure 41: Forecasted Changes in Marketing Expenditure by UK Foodservice Channels (%), 2013 ...................................................................... 113 Figure 42: Forecasted Changes in Marketing Expenditure by UK Foodservice Industry Suppliers (%), 2013 ......................................................... 115 Figure 43: Leading Sources for New Product Ideas by UK Foodservice Profit Sector (%), 2013 ............................................................................ 117 Figure 44: Leading Sources for New Product Ideas by UK Foodservice Cost Sector (%), 2013 ............................................................................. 119 Figure 45: Leading Sources for New Product Ideas by UK Foodservice Channels (% ), 2013 ............................................................................... 120 Figure 46: Leading Sources for New Product Ideas by UK Foodservice Industry Suppliers (%), 2013 ................................................................... 121 Figure 47: Key Promotional Channels in UK Profit Sector Foodservice Channels (%), 2011–2013 ........................................................................ 125 Figure 48: Key Promotional Channels in UK Cost Sector Foodservice Channels (%), 2011–2013 ......................................................................... 126


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LIST OF TABLES Table 1: Total UK Foodservice Industry Survey Respondents by Company Type, 2013 ........................................................................................... 11 Table 2: Total UK Foodservice Operator Respondents by Channel Type, 2013 ........................................................................................................ 11 Table 3: UK Foodservice Operator Respondents by Job Role (%), 2013 .................................................................................................................. 13 Table 4: UK Foodservice Operator Respondents by Company Turnover (%), 2013 .................................................................................................. 13 Table 5: Comparison of Revenue Growth Optimism in UK Profit Sector Foodservice Channels (%), 2013 ............................................................... 18 Table 6: Revenue Growth Optimism in UK Foodservice Profit Sector by Accommodation Channel (%), 2011–2013 ................................................ 21 Table 7: Revenue Growth Optimism in UK Foodservice Profit Sector Caterers’ Channel (%), 2011–2013 ................................................................ 21 Table 8: Revenue Growth Optimism in UK Foodservice Profit Sector Pubs, Leisure and Travel Channel (%), 2011–2013 ....................................... 22 Table 9: Revenue Growth Optimism in UK Foodservice Profit Sector Restaurants’ Channel (%), 2011–2013 .......................................................... 22 Table 10: Revenue Growth Optimism in UK Foodservice Industry by Senior Level Respondents (%), 2013 ............................................................. 23 Table 11: Revenue Growth Optimism in UK Profit Sector Foodservice Channels by Company Turnover (%), 2011–2013 ........................................ 24 Table 12: Budget Growth Expectations in UK Cost Sector Foodservice Channels (%), 2011–2013 .......................................................................... 26 Table 13: Budget Growth Expectations in UK Cost Sector Foodservice Channels by Company Turnover (%), 2013 ................................................ 27 Table 14: Revenue Growth Optimism in the UK Foodservice Industry by Supplier Respondents (%), 2013 .............................................................. 28 Table 15: Profitability Expectations in UK Profit Sector Accommodation Foodservice Channel (%), 2011–2013 ....................................................... 30 Table 16: Profitability Expectations in UK Profit Sector Catering Foodservice Channel (%), 2011–2013 ................................................................... 31 Table 17: Profitability Expectations in UK Profit Sector Pubs, Leisure and Travel Foodservice Channel (%), 2011–2013 ........................................ 31 Table 18: Profitability Expectations in UK Profit Sector Restaurants Foodservice Channel (%), 2011–2013 ............................................................. 32 Table 19: Profitability Expectations in UK Profit Sector Foodservice Channels by Company Turnover (%), 2013 ..................................................... 34 Table 20: Profitability Expectations by Foodservice Industry Suppliers (%), 2013 ..................................................................................................... 35 Table 21: Change in Profitability in UK Foodservice Channels by Customer Footfall (%), 2013 ................................................................................ 36 Table 22: Comparison of Customer Footfall in the UK Accommodation Foodservice Channel (%), H2 2012 vs. H1 2013 ......................................... 38 Table 23: Comparison of Customer Footfall in the UK Catering Foodservice Channel (%), H2 2012 vs. H1 2013 ..................................................... 39 Table 24: Comparison of Customer Footfall in the UK Pubs, Leisure and Travel Foodservice Channel (%), H2 2012 vs. H1 2013 ........................... 41 Table 25: Comparison of Customer Footfall in the UK Restaurants Foodservice Channel (%), H2 2012 vs. H1 2013 ............................................... 42 Table 26: Comparison of Customer Footfall in the UK Education Foodservice Channel (%), H2 2012 vs. H1 2013 .................................................. 43 Table 27: Comparison of Customer Footfall in the UK Other Cost Sector Foodservice Channels (%), H2 2012 vs. H1 2013 .................................... 44 Table 28: Important Drivers of Customer Demand in UK Foodservice Operator – 2012 vs. 2013 .............................................................................. 45 Table 29: Key Drivers of Customer Demand in UK Profit Sector Foodservice Channels (%), 2013 ........................................................................... 47 Table 30: Key Drivers of Customer Demand in UK Cost Sector Foodservice Channels (%), 2013 ............................................................................ 49 Table 31: Important Customer Demand Drivers in UK Foodservice Channels (%), 2013 .......................................................................................... 51 Table 32: Comparison of Leading Business Concerns in UK Foodservice Channels (%), 2011–2013 ...................................................................... 54 Table 33: Comparison of Leading Business Concerns by UK Foodservice Channels (%), 2013 ............................................................................... 55 Table 34: Leading Business Concerns in UK Foodservice Channels by Company Turnover (%), 2013 .................................................................... 57 Table 35: Calorie Labelling Concerns in UK Foodservice Sectors (%), 2013 ............................................................................................................ 58 Table 36: Calorie Labelling Concerns in UK Foodservice Channels (%), 2013 ......................................................................................................... 59 Table 37: Calorie Labelling Concerns in UK Foodservice Channels by Company Turnover (%), 2013 ...................................................................... 60 Table 38: Customer Satisfaction Parameters in UK Profit Sector Foodservice (%), 2013 .......................................................................................... 62 Table 39: Customer Satisfaction Parameters in UK Cost Sector Foodservice (%), 2013 ........................................................................................... 64 Table 40: Important Customer Satisfaction Parameters across UK Foodservice Channels (%), 2013 ....................................................................... 65 Table 41: Food and Beverage Trends in UK Profit Sector Foodservice Channels (%), 2013 ..................................................................................... 68 Table 42: Food and Beverage Trends in UK Cost Sector Foodservice Channels (%), 2013 ...................................................................................... 70 Table 43: Key Promotion Activities in UK Profit Sector Foodservice Channels (%), 2013.......................................................................................... 73 Table 44: Key Promotion Activities in UK Cost Sector Foodservice Channels (%), 2013 .......................................................................................... 74 Table 45: Expected Change in Food and Beverage Prices by UK Foodservice Sectors (%), 2013 ........................................................................... 77 Table 46: Expected Change in Food and Beverage Prices by UK Foodservice Channels (%), 2013......................................................................... 78 Table 47: Expected Change in Food and Beverage Prices by UK Foodservice Industry Suppliers (%), 2013 ........................................................... 79 Table 48: Expected Change in Food and Beverage Prices across UK Foodservice Channels by Company Turnover (%), 2013 .............................. 80 Table 49: Comparison of Supplier Selection Criteria by UK Foodservice Industry Profit and Cost Sector (%), 2011–2013 ........................................ 82 Table 50: Supplier Selection Criteria in UK Profit and Cost Sector Foodservice Channels (%), 2013 ........................................................................ 84 Table 51: Supplier Pricing Trends in UK Profit Sector Foodservice Channels (%), 2013 ........................................................................................... 85 Table 52: Supplier Pricing Trends in UK Cost Sector Foodservice Channels (%), 2011–2013 .................................................................................. 87 Table 53: Expectations of Capital Expenditure by UK Foodservice Industry Profit Sector (%), 2011 ......................................................................... 90 Table 54: Expectations of Capital Expenditure by UK Foodservice Industry Profit Sector (%), 2012 ......................................................................... 91 Table 55: Expectations of Capital Expenditure by UK Foodservice Industry Profit Sector (%), 2013 ......................................................................... 91 Table 56: Expectations of Capital Expenditure by UK Foodservice Industry Cost Sector (%), 2011 .......................................................................... 93 Table 57: Expectations of Capital Expenditure by UK Foodservice Industry Cost Sector (%), 2012 .......................................................................... 94 Table 58: Expectations of Capital Expenditure by UK Foodservice Industry Cost Sector (%), 2013 .......................................................................... 94 Table 59: Expectations of Increase in Capital Expenditure by UK Foodservice Channels (%), 2013 ......................................................................... 96


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Table 60: UK Foodservice Industry Suppliers’ Expectations of Capital Expenditure (%), 2013 .................................................................................. 96 Table 61: Change in Expenditure on Products and Services by Caterers’ Channel (%), 2013 .................................................................................. 99 Table 62: Change in Expenditure on Products and Services by Restaurants Channel (%), 2013 ............................................................................ 101 Table 63: Change in Expenditure on Products and Services by Education Channel (%), 2013 ............................................................................... 102 Table 64: Change in Expenditure on Products and Services by Other Cost Sector Channels (%), 2013 ................................................................. 104 Table 65: Recruitment Activities in UK Profit and Cost Sector Foodservice Channels (%), 2011–2013 ................................................................... 107 Table 66: Recruitment Activities in UK Foodservice Channels by Company Turnover (%), 2013 ............................................................................ 108 Table 67: Forecasted Changes in Marketing Expenditure by UK Foodservice Channels (%), 2011 ........................................................................ 112 Table 68: Forecasted Changes in Marketing Expenditure by UK Foodservice Channels (%), 2012 ........................................................................ 112 Table 69: Forecasted Changes in Marketing Expenditure by UK Foodservice Channels (%), 2013 ........................................................................ 113 Table 70: Forecasted Changes in Marketing Expenditure by UK Foodservice Industry Suppliers (%), 2013 ........................................................... 114 Table 71: Leading Sources for New Product Ideas by UK Foodservice Profit Sector (%), 2013 .............................................................................. 117 Table 72: Leading Sources for New Product Ideas by UK Foodservice Cost Sector (%), 2013 ............................................................................... 118 Table 73: Leading Sources for New Product Ideas by UK Foodservice Industry Suppliers (%), 2013 ..................................................................... 121 Table 74: Key Promotional Channels in UK Profit Sector Foodservice Channels (%), 2011–2013 .......................................................................... 124 Table 75: UK Foodservice Industry Suppliers’ Key Promotional Channels (%), 2013 .............................................................................................. 127 Table 76: Survey Results – Closed Questions ........................................................................................................................................................ 128


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1 Introduction

1.1 What is this report about?

This report is the result of an extensive survey drawn from Canadean’s exclusive panel of leading UK

foodservice industry companies. In reference to growing uneven market conditions within the UK, this report

provides the reader with an extensive and authoritative analysis of industry sentiments and explores how

opportunities and demand are set to change in 2013. Additionally, this report also presents comparative

analysis between three years of survey results (wherever applicable). Furthermore, this report not only grants

access to the opinions and strategies of business decision makers and competitors, but also examines their

actions surrounding business priorities. The report also provides access to information categorised by sector

and channel of operation.

The report also examines:

Revenue growth expectations: projects revenue growth expectations of key stakeholders in the UK

foodservice industry

Chief foodservice trends: showcases principal trends that will shape the UK foodservice industry in the next

12 months

Capital expenditure priorities: notes the key priorities of companies with regards to capital expenditure

Leading business concerns: identifies leading business concerns and subsequent efforts to negate them

Factors for supplier selection: understands critical factors influencing supplier selection

Marketing expenditure trends: forecasts the possible changes in marketing budgets of foodservice

operators and lists key marketing and promotional channels

1.2 Definitions

Profit sector: Profit sector refers to foodservice operators in channels such as hotels, accommodation

facilities, restaurants, pubs, leisure, private companies, on-travel services and other contract catering. These

operators run on a profit and loss basis and are free to decide on the menu and pricing

Cost sector: Cost sector refers to foodservice operators who work in channels such as government and

private hospitals, nursing homes, school meals (state and independent schools), government departments,

meals on wheels and welfare, prison catering, police and fire services, and the Ministry of Defence. These

operators run on fixed contracts and often operate with fixed budgets or fixed price lists set by relevant

authorities

Food miles: a term which refers to the distance food is transported from the time of its production until it

reaches the consumer

Footfall: count of customers who enter a shop or outlet or public space. Footfall monitoring is a key indicator

of popularity and also identifies the trends and patterns in customer demand


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Calories labelling: information on calorie counts and nutritional information of products on the menu. This

information helps customers to understand the nutritional benefits of the product/menu item before purchase

VAT: It is defined as the value added to a product by or with a business is the sale price charged to its

customer, minus the cost of materials and other taxable inputs

ROI: It is defined as a performance measure used to evaluate the efficiency of an investment or to compare

the efficiency of a number of different investments

1.3 Methodology

1) Online Survey

The research source in this report is based on the surveyed opinions and forward-looking expectations of senior

industry professionals. Canadean conducted an extensive online survey during January 2013 taken by 213

senior UK industry foodservice operators. These respondents cover owners, directors, managers, and technical

and professional staff.

These respondents are drawn from the Canadean Industry Insight Panel, an exclusive industry panel covering

over two million business professionals worldwide. Respondents represent a dedicated professional community

where participants are surveyed ‘in context’, drawn from our industry magazine readership and media

communities, including the readership of Eat Out, Cost Sector and delegate relationships across our global

industry conference and forum events. These business communities are composed of qualified professionals

who rely on our flagship media brands in their respective markets, enabling Canadean to access knowledgeable

and informed industry opinion.

2) Secondary Research

Comprehensive international desk research was conducted across the following industry sources that focused

on determining the latest themes, issues, market trends and examples of new products. Such examples have

been included to validate the primary research observations.

Industry associations

International organizations

Industry news websites

3) Data Analysis and Report Writing

The results of this research have been analyzed and evaluated by Canadean’s in-house industry-specific

analysts. Our analysts’ research and analysis expertise, pedigree in marketing, market research, consulting

background in their industry, and ongoing continuous education on leading macro-economic and industry news

and events have shaped their analytical judgments and conclusions of the industry opinions gathered.


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4) Quality Control

Detailed process manuals

Standardized report templates and accompanying style guides

Advanced data analysis and survey programming tools

QC checklists

Randomized spot checks on data integrity

Senior level QC


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Figure 1: Comparison of Revenue Growth Optimism in UK Profit Sector Foodservice Channels (%),

2013

Source: Canadean © Canadean

1.3.1 Revenue growth expectations in UK profit sector foodservice channels

Respondents from companies operating in the UK profit sector channels are confident regarding the growth of

the foodservice industry in 2013. Overall, 62% of respondents from the profit sector channels are either ‘very

confident’ or ‘confident’ of revenue growth in 2013.

A decline in unemployment levels and an increase in disposable income throughout the UK are some of the

factors supporting revenue growth expectations within profit sector channels such as ‘accommodation’, ‘pubs,

leisure and travel’, and ‘restaurants’. Additionally, the increase in revenue growth registered by a number of

large companies has further strengthened such sentiments. For example, in December 2012, hotel and

restaurant group Whitbread announced an increase in its Q3 2012 sales at both its Costa Coffee chain and

Premier Inn hotels. The operator noted good performance from its hotels and restaurants in H1 2012 with

revenue rising by 10% to GBP705.9 million (US$1131 million). Whitbread explained that its Premier Inn revenue

increased by 12.9% to GBP443.5 million (US$711 million), and its revenue from restaurants rose by 5.3% to

GBP262.4 million (US$420.3 million). Moreover, sales at its Costa Coffee chain increased by 7.1% in November

2012 compared to November 2011, benefitting from the London Olympics 2012. Commenting on the growth

prospects, a senior executive from Whitbread noted:


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1.3.2 Expected change in food and beverage prices by suppliers

According to the Canadean survey, 55% of supplier respondents forecast an increase in food and beverage

prices in 2013. Interestingly, no suppliers are of the opinion that food and beverage prices may decrease over

2013, a fact which is significant, considering the role of the suppliers in the value chain and efforts at reducing

prices which originate at their level. It may be safely deduced that UK consumers can look ahead towards a

year of surging prices, and any efforts within the industry towards the stabilization of prices seems bleak at the

moment.

Table 47: Expected Change in Food and Beverage Prices by UK Foodservice Industry Suppliers (%),

2013

Change Percentage

Increase considerably 0%

Increase slightly 55%

No change 26%

Decrease slightly 0%

Decrease considerably 0%

Don't know 18%

Overall 100%

N.B. Results may not equal 100% due to rounding methods


Figure 28: Expected Change in Food and Beverage Prices by UK Foodservice Industry Suppliers

(%), 2013



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1.3.3 Key marketing and promotional channels in UK cost sector foodservice channels

Of cost sector respondents, 62%, 52%, and 44% consider ‘email and newsletters’, ‘workplace intranets’, and

‘direct mail and leaflets’ key promotional channels respectively. ‘Local events’, ‘near premise outdoor

advertising or signage’, and ‘online social media’ are considered other important promotional channels. For

foodservice operators in the cost sector, ready-made platforms such as intranets and online notice boards on

which to display marketing information are considered more viable. These are also encouraged by the

organizations that employ foodservice operators, as this promotional information provides more options to staff.

Figure 48: Key Promotional Channels in UK Cost Sector Foodservice Channels (%), 2011–2013


Documents

The UK Foodservice Operators' Business Sentiments and ... - SP.pdfJohn Carpenter House, 7 Carmelite Street, London, EC4Y 0BS, United Kingdom, Tel: +44 (0) 20 7936 6400, Fax: +44 (0)