2018 Catering challenges and the best way to meet them

January 19, 2024


Rising food costs, high business rates and wage increases are among the many threats to caterers in 2018. With economic and industry challenges piling up in 2018, it’s a good time to look at what caterers can do to not only survive, but thrive.

Catering Event

Times are getting tougher in the restaurant industry. Pressure will be placed on revenues as many countries increase their minimum wage this year. Twenty US States will raise it by an average of 41 cents an hour this year, the UK is going up 33 pence, and several Canadian provinces and territories are increasing their minimum wage by over a dollar in 2018.

Meanwhile, rising food costs, high business rates, and a weak post-referendum currency in the UK’s case, are set to squeeze caterers. Combine that with a fall in consumer confidence placing a similar squeeze on disposable incomes, and the importance of beating the competition is more important than ever.

And that competition is coming not only from similar restaurants (quick service restaurants are predicted to grow in number by 2% in the US this year), but also supermarkets. In the tight profit margins of the restaurant industry, lowering prices will not be an option. In fact, recent data shows that one in three of the UK’s top 100 restaurants is loss making - a rise of 75% on last year.

So what options are there for caterers? A recent Deloitte report of changing tastes in the UK casual dining market may provide some answers...

Consumer tastes are changing

With this level of saturation in the market, it’s crucial that caterers meet customer needs. And those needs are changing rapidly. Home delivery in the UK is growing ten times faster than the eating-out market.

Two years ago, deliveries represented around 7% of restaurant sales in the US. Morgan Stanley predicted last year that that number could reach 40%, or even higher in urban areas and casual restaurants, where delivery is concentrated.

Clearly, consumers want to dine on their terms and eat where it’s most convenient for them. The opportunities for corporate catering are significant, and represent a huge potential revenue stream for caterers. But meeting customer needs goes beyond where they want their food - it’s also about how they want to order.

The restaurant of the future

In Deloitte’s market report, Lead Partner Sarah Humphrey’s writes about how technology can be used to meet the changing requirements of consumers and to improve the efficiency of the service provided to them:

“The use of digital technology is also increasingly impacting across the whole of a restaurant’s operations. We believe the “restaurant of the future” will use technology throughout the customer journey, whether it be to provide delivery and pre-ordering services, or to connect to consumers in-store to offer customisable menus and dynamic pricing."

Most caterers understand the need to let customers order online - the method they increasingly expect to be available to them. Fewer businesses have harnessed the full potential of technology running throughout the operation of a secondary revenue stream like drop off catering. America has proved to be ahead of the curve here, and it’s encouraging that the UK is beginning to embrace tech at a much faster rate.

Delivery and pre-ordering offer revenue growth opportunities, and automation by allowing customers self-service ordering and payment increases sales, but automation behind the scenes is where efficiency is introduced, and where businesses can mitigate the impact of minimum wage rises, inflated food prices and high business rates.

Running software behind the scenes as an FSM caterer, so that a customer’s order is automatically sent to the correct kitchen, with all details automatically being stored, and every item in production for the day automatically aggregated ensures minimum waste and maximum efficiency. A catering management system like Spoonfed ensures that customers always get the food they want - the best way to build loyalty in a competitive market.

It’s these forward-thinking companies that will not only survive the harsh economic environment, but thrive in it, building a customer base that will stay with them when conditions change.

To talk to us about the challenges your catering business is facing, and how Spoonfed can help, drop us a line at: