Trends notable in the industry include the drive by clients and contractors towards low or nil subsidy contracts, which has more of an emphasis on a commercial approach. According to the British Hospitality Association, the total number of nil cost contracts increased by more than 20% year on year. However, they still only make up less than 5% of the total market. The success of nil subsidy agreements depends on two key ingredients:
- Having sufficiently large head counts at the site (s)
- The caterer being given high levels of autonomy by the client to enable them to run their catering services appropriately.
Move to Nil Subsidy Contracts
Clients will be looking for caterers to take on even more responsibility as the economic situation is forecasted to worsen. Nil subsidy or low subsidy contracts can be run profitably under the right circumstances; this includes having a enough footfall in the staff refreshment facility with a head count of around 1,000 deemed mandatory. However, this is dependent on the nature and extent of the food service outlet.
Unless an organisation has a enough head count, running an all-day service is crucial for making nil subsidy contracts viable. The franchising of high street brands is also important although in-house brands are falling in influence.
Next Steps to Nil Cost Catering
So, how do you structure a catering facility to move towards nil cost catering? In short there is no magic bullet but a series of strategies that need to be put in place to ensure that any subsidies are minimised and, in some cases, eliminated. Catering Consultancy Bureau has a successful track record in reducing and eliminating catering subsidies. With the concentration of catering talent within CCB, we are perfectly placed to l work with the client organisation and caterer to ensure that strategies are put in place and implemented.