The food service industry is sensitive to the outsourcing of catering services by governments and businesses, increased construction of stadiums and sport attendance, and domestic and international airline travel patterns.
IBISWorld estimates industry revenue will increase at an average annualised real rate of 2% over the five years to 2009-10. Subdued economic and employment growth has adversely affected industry demand. Significant rationalisation in employment across the manufacturing and banking and finance sectors has resulted in weak demand for catering services.
Before the global financial crisis hit, robust economic and employment growth led to healthy industry revenue. Increased demand came from defence force catering and the expansion of mining projects. Profit margins have generally remained tight over the past five years due to high levels of industry competition and slow demand. Obtaining long-term and viable contracts has been a main focus for industry players.
Increasingly, a number of large tenders are calling for catering services to be combined with cleaning, security, maintenance and other services in the one contract. Links with other business services companies is becoming more and more important. Continue reading
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