Strategic Analytical Review of the Catering Sector

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Strategic Analytical Review of the Catering Sector
James Guild Oliver Benbow Gareth Williams Claire
Ryder Lisa Westwood
Bournemouth UniversityBAIHMBusiness Strategy
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Introduction

• Catering sector consists of
• - Restaurants
• - Takeaways/Cafés
• - Pubs/Bars
• - Hotels
• Each sub-sector caters for a similar segment of
  the entire market
• Investing in the sector?

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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)

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Analysed Sector - Restaurants

• Restaurants
• - Fine Dining
• - Independent /Privately owned
• - Brassiere
• - Ethnic
• - A la Carte
• - Table dhote
• - Themed/Branded Restaurants

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Boston Consultancy Group Model

• Reason for analysing Restaurants
• Market Share

High
Low
Growth
Low
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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

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• Increase PDI and Consumer Expenditure Trends
  1994-1999

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• Increase in eating out

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Trends In The Catering Industry

• Inbound tourism

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Competitors

• Direct
• - Takeaways/Cafés
• - Supermarket/Convenience Food
• - Pubs
• - Hotels
• - Contract Catering i.e. in store

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Competitors

• Indirect
• - Theme parks
• - Leisure centres
• - Shopping centres
• - Cinemas
• - Hobbies

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(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

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(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

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(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

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(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

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(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)

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(DEEPLIST) Factors Influencing The Catering
Sector

• Informational
• - Increased access to multimedia systems
• - Virtual tours
• - Consumers choice to access and research
  
• specified eating requirements

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(DEEPLIST) Factors Influencing The Catering
Sector

• 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

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(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

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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

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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

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Main Market Audience
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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

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Recommendations

• Demographic location/infrastructure
• Know your legislation
• Effective and efficient use of resources

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Conclusion

• The next 5 yrs will see an uncertain economic
• climate, worldwide. However current trends
• indicate a growth in eating establishments,
• particularly branded outlets. People will
• continue to eat out,as it is now a characteristic
• of the population!

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