In 2014, the non-domestic catering equipment market was estimated to be worth over £750m, representing a growth of around 4% on 2013. The market is considered to be mature across all sectors. As a result, there is limited potential for growth through increased penetration, making the market subject to performance of the overall economy and food industry.
UK household expenditure on catering services, including drink, in 2013 was nearly £84bn, which indicates the potential scale of demand for catering equipment. The catering market struggled during the early part of the recession, but has experienced a rising trend in expenditure since 2010 and has proved to be a successful sector, outperforming most other areas of consumer spending over the last 5 years.
The main factor supporting growth of the catering equipment market since 2010 has been the overall improvement in the economy and the strong resilience of the restaurant sector. Innovative concepts and new restaurant brands, along with an improvement in household spending on eating out, has helped grow the catering sector - and therefore demand for catering equipment.
Other factors supporting market growth include product development creating added value features; higher hygiene standards; the requirement for smaller and more environmentally friendly, sustainable products in response to tightening legislation; and the development of restaurant and hotel chains.
Whilst the government remains committed to public sector cutbacks affecting some demand, the budgets for the NHS remain secure along with educational catering, which has been singled out and budgeted for future growth in catering needs including the extension of free school meals.
Cooking equipment is the largest sector and accounts for over 50% of market value. Refrigeration accounts for around a quarter, with steel fabrication, warewashing and other products making up the remaining market value. The leading end user is the hospitality sector, with restaurants, cafes and bars accounting for around 54% of the market. The remainder is accounted for by health and education, with a reasonable share, hotels, and other sectors such as offices, leisure and retail.
Products are largely distributed through specialist distributors and designers and installers, although there is some direct delivery, particularly as the internet becomes more widely used. Direct delivery is more prevalent in the steel fabrication side, where bespoke solutions dominate.
The outlook for the catering equipment market is good, providing the UK economy continues to strengthen and the hospitality industry continues to grow, with the restaurant sector a key factor influencing growth in catering equipment demand.
“The government has committed to reducing the level of public sector debt, resulting in reduced levels of expenditure across many government departments, and this will continue to depress demand for catering equipment within government departments” said Andrew Hartley, Director of AMA Research. “But other sectors continue to show ongoing sustained budgets, for example in healthcare with education receiving an extra boost of over £1 billion in funding in 2014-15 for the free school meals programme.”
More information can be found on: www.amaresearch.co.uk/catering_equipment_15.html
The ‘Non-Domestic Catering Equipment Market Report – UK 2015-2019 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.