COVID-free Christmas boosts contract caterers' sales by 27%

However, trading is still below pre-pandemic levels.

Contract catering sales experienced a 27% growth in the fourth quarter of 2022, thanks to a COVID-free Christmas and a steady return to workplaces, according to the latest Contract Catering Tracker from CGA by NielsenIQ and Bidfood. 

The report revealed that sales from October to December 2022 increased from the same quarter in 2021, when caterers were hit by growing concerns about the Omicron variant of COVID-19. Sales in the private sector also saw a year-on-year increase of 32%, as more people switched back to offices from home-based working.

However, the report noted that sales in the last quarter of 2022 were still 7% lower than the equivalent period in 2019, when businesses were operating normally. The number of outlets served by contract caterers has also dropped by approximately 14% since late 2019.

Karl Chessell, CGA's director - hospitality operators and food, EMEA, highlighted that while sales have steadily grown since the end of COVID-19 restrictions, sales and margins are now under intense pressure from the soaring energy and food costs. "Real-terms growth will be difficult in 2023, and all businesses will be hoping for respite on inflation as the year goes on," he said.

Debra Morrell, business development controller at Bidfood, added, "It's good to see that on the face of it, the sector is creeping back towards its pre-COVID-19 levels, although we believe value sales (due to inflation) may mask the true picture in terms of meals served."

UKHospitality chief executive Kate Nicholls acknowledged that while contract caterers saw some relief from the disruption caused by rail strikes, record food and drink inflation is still a key factor in why real-term sales are lagging behind pre-pandemic levels. "With 2022 marred by rising costs, contract caterers will be hoping 2023 is the year inflation begins to significantly reduce," she said.

The Contract Catering Tracker from CGA provides a valuable benchmarking tool to measure performance across various metrics and market groupings. It aggregates sales from leading operators to provide monthly reports with year-on-year analysis. Participants in the Tracker receive additional analysis in return for their contributions.

According to the report, trading conditions will remain difficult in 2023, despite signs of gradual return towards pre-COVID levels.