Sales at the leading contract catering companies in Britain increased by 7% year-on-year during the third quarter of 2024, according to the latest Contract Catering Tracker from CGA by NIQ and Bidfood.

This marks the 14th consecutive quarter of sales growth for caterers. Although the 7% increase was slightly lower than the 10% growth recorded in the second quarter of the year, year-on-year sales growth for multi-academy trusts (MATs) has reached an impressive 9%.

The third quarter also saw a modest increase in the number of outlets served by contract caterers. Following a consistent decline since the onset of the COVID-19 pandemic, the number of sites grew by 1% year-on-year.

The report monitors the performance of leading operators in the sector, providing a benchmarking tool to evaluate performance across various metrics and market segments. Participants in the tracker benefit from additional insights and analysis in exchange for their contributions.

Karl Chessell, director – hospitality operators and food, EMEA at CGA by NIQ, said: “Fourteen consecutive quarters of growth is an outstanding achievement by the contract catering sector. It is particularly impressive in light of the severe inflationary pressures that it has faced in the last few years and demonstrates the strong underlying demand for its services across both the public and private sectors. Those cost challenges are unfortunately going to intensify following the autumn Budget, which risks compromising the major economic contributions of caterers.”

Debra Morrell, business development controller for B&I at Bidfood, said: “We’re pleased to see another strong quarter of growth in contract catering, and for the first time, a turnaround in the number of outlets.

“However, whilst we’re seeing a positive picture of a resilient and agile sector, having clawed its way back after significant challenges faced over the last few years, it’s hard to retain the same positivity about the outlook going forwards following the autumn budget. The additional cost burdens imposed on businesses will no doubt reverse some of these trends, and could potentially result in closures and job losses across the sector as well as a spike in inflation, additional pressure on public sector budgets and impacts on consumer spending.”

Morrell highlights the compounded challenges posed by changes in National Insurance, the rise in the minimum wage, the Employment Rights Bill, and the reduction in business rates relief. Morrell warns that the upcoming trading environment “will be hard for all businesses to ensure, particularly those in a service sector that is a key employer, and will have a devastating effect on many SMEs. We will be adding our voice to that of UKHospitality in raising our concerns with government”.

Kate Nicholls, chief executive of UKHospitality, said: “We are once again seeing positive sales and growth figures from contract caterers, with sales increases for more than three years. However, the recent changes to employer National Insurance contributions put all of that positivity at risk in April.

“Contract caterers deliver a vital public service to our schools, hospitals, visitor attractions and many more, and we need urgent action to mitigate the impact of these increases.”

The Contract Catering Tracker by CGA and NIQ is supported by partners including ABM Catering, Artizian Catering Services, Bartlett Mitchell, BaxterStorey, Blue Apple, CH&Co, Compass UK, Elior UK, Genuine Dining Co, Harrison Catering Services, and Sodexo UK.