Contract Catering: Inc Impact of COVID-19 - UK - December 2020

OVERVIEW
Key issues covered in this Report
COVID-19: Market context
Impact of the January 2021 lockdown and the vaccination rollout
Economic and other assumptions
Products covered in this Report
EXECUTIVE SUMMARY
Impact of COVID-19 on contract catering
Figure 1: Short, medium and long term impact of COVID-19 on contract catering, 18 December 2020
The market
Market size and forecast
Figure 2: Market size and forecast for the UK contract catering market, 2016-25, (£ billion)
Companies and brands
COVID-19 derails growth of new influx of outlets and companies
Site closures are driving investments into a digitised future
The consumer 
The impact of COVID-19 on consumers
Figure 3: Level of concern regarding exposure to COVID-19, March and November 2020, (% of respondents)
Visitation of catering facilities
Figure 4: Visitation of catering facilities before COVID-19, September 2020, (% of respondents)
The impact of COVID-19 on canteen usage 
Figure 5: Future canteen usage intentions over the next 12 months, September 2020, (% of respondents)
Canteen purchasing preferences
Figure 6: Motivating factors behind canteen purchases, September 2020, (% of respondents)
Interest in food-related work benefits
Figure 7: Interest in food-related workplace benefits, September 2020, (% of respondents)
ISSUES AND INSIGHTS
COVID-19 restrictions boost the benefits of food delivery through central kitchens 
Cost quality and hygiene
THE MARKET – KEY TAKEAWAYS
Coronavirus restrictions bring about severe disruption to market activity 
Vaccination programme will slowly lift consumer confidence but a no-deal scenario could derail this
Hygiene joins environmental ideals as leading expectations for caterers
New costs and lower revenues are pushing caterers to innovate quickly
MARKET SIZE
Closures and distancing cut market value in half for 2020
Figure 8: Short, medium and long term impact of COVID-19 on contract catering, 18 December 2020
Figure 9: UK contract catering market value, 2016-20, (£ billion)
MARKET FORECAST
2021 update
Vaccination will open the path to full recovery while deployment of digital investments fills temporary revenue gaps
Figure 10: UK contract catering market value forecast, 2020-25, (£ billion)
MARKET TRENDS
Responses to COVID-19 concerns
Health-conscious consumers are open to catering-to-home 
Figure 11: Proportion of UK businesses currently trading that have done so for more than two weeks, selected industries, 19 October – 1 November 2020, (% of all businesses)
Younger generations are making environmental and ethical credentials more important than ever
MARKET DRIVERS
2021 update
Effects of COVID-19 on the contract catering market
Figure 12: Proportion of UK businesses that have changed operation hours due to local or national lockdown regulations, selected industries, 19 October – 1 November 2020, (% of businesses)
Supply chains
Analytics
Workplace catering
Figure 13: Proportion of businesses expecting to close sites temporarily or permanently sites, selected industries. 19 October – 1 November 2020, (% of businesses)
Figure 14: Reasons for expected site closures of businesses expecting to close sites temporarily or permanently sites, selected industries, 19 October – 1 November 2020, (% of businesses)
Schools and universities
Figure 15: Number of higher education qualifications achieved, academic year 2009/10 – 2018/19, (number of students)
Brexit could raise costs for caterers
COMPANIES AND BRANDS – KEY TAKEAWAYS
Recovery bringing in an influx of businesses and outlets will be disrupted by COVID-19 
Site closures have bolstered technology investment to facilitate a contactless future
INDUSTRY PROFILE
Changes in industry structure
Figure 16: Changes in the industry structure of ‘other food service’ activities, 2016-20, (number of businesses and outlets)
Changes in employment structure
Figure 17: Changes in the employment structure of ‘other food service’ activities, 2019 and 2020, (number of outlets)
Changes in financial structure
Figure 18: Changes in the financial structure of ‘other food service’ activities, 2019 and 2020 (number of businesses)
COMPANY PROFILES
Aramark Limited
Recent activity
Financial information
Figure 19: Financial analysis of Aramark Limited, 2015-19, (£ million and %)
BaxterStorey
Recent activity
Financial information
Figure 20: Financial analysis of BaxterStorey Limited, 2014-18, (£ million and %)
CH&amp;CO Catering Group
Recent activity
Financial information
Figure 21: Financial analysis of CH&CO Catering Group Limited, 2014-18, (£ million and %)
Compass Contract Services (UK)
Recent activity
Financial information
Figure 22: Financial analysis of Compass Contract Services (UK) Limited, 2015-19, (£ million and %)
Elior UK 
Recent activity
Financial information
Figure 23: Financial analysis of Elior UK Plc, 2015-19, (£ million and %)
SSP Group
Recent activity
Financial information
Figure 24: Financial analysis of SSP Group Plc, 2015-19, (£ million and %)
THE CONSUMER – KEY TAKEAWAYS
Lower levels of concern reflect public’s ongoing adaptation to the pandemic 
Canteens at places of study showed most engagement
Over a quarter of consumers will avoid canteens because of COVID-19 
Price is a key concern but quality still matters 
Consumers value food-related benefits but want more than just snacks 
THE IMPACT OF COVID-19 ON CONSUMERS
Consumers are less worried about COVID-19
Figure 25: Level of concern regarding exposure to COVID-19, March and November 2020, (% of respondents)
Decrease in furloughed status unlikely to bring step-change in consumer spending
Figure 26: Effects of COVID-19 on individuals, selected responses, May and November 2020, (% of respondents)
COVID-19 is inhibiting engagement with leisure and travel activities
Figure 27: Consumer attitudes towards selected activities, November 2020, (% of respondents)
VISITATION OF CATERING FACILITIES
Frequent canteen use most likely in college, university and workplaces
Figure 28: Visitation of catering facilities before COVID-19, September 2020, (% of respondents)
Figure 29: Frequency of canteen visitation before COVID-19, September 2020, (% of respondents)
THE IMPACT OF COVID-19 ON CANTEEN USAGE 
Virus exposure concerns are the leading driver of decreased canteen usage
Figure 30: Future canteen usage intentions over the next 12 months, September 2020, (% of respondents)
Post-COVID hygiene marketing should emphasise what consumers think best addresses their concerns about the virus
Figure 31: Factors behind intentions to use canteens less over the next 12 months, September 2020, (% of respondents)
Personal contact restrictions should bolster the implementation of digital catering platforms
Figure 32: Most influential COVID-related factors in encouraging canteen visitation, September 2020, (% of respondents)
CANTEEN PURCHASING PREFERENCES
Price matters as purse strings are tightened but consumers will demand quality before parting with their cash
Figure 33: Motivating factors behind canteen purchases, September 2020, (% of respondents)
Desire to live up to ethical ideals is driving engagement with healthier alternatives 
Figure 34: Canteen purchasing interests, September 2020, (% of respondents)
INTEREST IN FOOD-RELATED WORKPLACE BENEFITS
Consumers are open to food-related benefits but want something more substantial than snacks 
Figure 35: Interest in food-related workplace benefits, September 2020, (% of respondents)
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
FURTHER SOURCES AND CONTACTS
Trade associations
UK Hospitality
Hospital Caterers Association
The Association of Catering Excellence (ACEGB)
The Nationwide Caterers Association (NCASS)
Trade magazines
Catering Insight
Essentially Catering
Foodservice Equipment Journal
Hospitality and Catering News
The Caterer
Trade events
Hotel, Restaurant & Catering Show
The International Food & Drink Event
Catering Equipment Expo (as part of The Restaurant Show)