UKHospitality: ‘A glimmer of light’
Kate Nicholls, chair of UKHospitality, looks at the findings from the latest Contract Catering Tracker.
Hey, how about this?! A glimmer of light in the otherwise gloomy, pre-budget landscape. According to the new Contract Catering Tracker from CGA by NIQ, Bidfood and UKHospitality, leading contract caterers’ sales rose 12.2% year-on-year in the third quarter of this year.
We shouldn’t be too surprised at this good news, though, because it continues a long run of growth for the sector in every post-pandemic quarter since mid-2021. It also marks an acceleration of growth in 2025, following increases of 8% and 9.5% in the first and second quarters of the year respectively.
Indeed, caterers have outperformed other parts of the sector in recent years, with strong organic sales growth and a steady increase in new contracts. It’s a clear demonstration of their resilience in an extremely challenging business environment with huge cost pressures.
That contact catering continues to grow at this rate is quite remarkable and its potential for even further growth is clear. It, along with the wider hospitality industry, could really fly if the tax burden were to be reduced come the budget.
Yes, the ‘B’ word. With just days to go as this is printed, we’re keeping up the pressure to have these essential measures included in the budget: fix National Insurance Contributions (NICs), cut VAT and lower business rates.
Fixing NICs would boost jobs by extending existing exemptions to young and old, plus those moving from welfare to work. Changing NICs was a backward move that’s had a negative effect on entry-level jobs. Hospitality could be facing at least 150,000 fewer workers unless the government changes its approach to our sector.
A VAT cut, meanwhile, like the one that so helped thousands of hospitality businesses during Covid would help drive investment by bringing us into line with many of our European rivals.
Of less direct benefit to contract caterers – but vital for some of their clients – is a business rates reduction. Our declining high streets would receive a much-needed boost by lowering them via a 20p maximum discount for hospitality businesses under £500,000 rateable value. This should be implemented alongside a commitment that no hospitality property above £500,000 pays higher rates.
We’re also continuing to press for other sector-friendly measures from the chancellor on 26th November, like supporting skills through the apprenticeship levy. We welcomed the Labour Party’s manifesto pledge to transform this into a skills and growth levy, but there’s been little progress. Therefore, we’re urging Skills England to consult fully with employers about what skills and training they wish to see funded through a raised levy – directed at onboarding and offboarding to apprenticeships (common induction, digital and management skills).
So, as the fateful day draws closer, UKHospitality is issuing one last rallying cry, calling on all hospitality businesses, big and small, to help drive home our pre-budget message to the chancellor, via our #TaxedOut campaign. On our website, you can find a toolkit that makes it easy for operators and venues to write to their MP, print and display our poster and promote the #TaxedOut campaign via social media. Writing to your local MP, even at this, the 11th hour, is something we’d especially urge you to do, because strength of feeling is something MPs do take notice of.
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