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The entire ‘Foodservice’ industry, catering establishments and peripheral channels that cover immediate consumption occasions, closed 2023 with sales of 41.1 billion euros, up 10%, according to data from the 2023 Observatory of Branded Catering, prepared by Catering Brands, Circana and KPMG in Spain.
Specifically, this figure represents strong growth for the sector, both in terms of spending (+9.4%) and visits, which rose by 3.5%, compared to 2022, placing Spain as the leading market in evolution within the main European countries. In the specific case of Branded Catering, this again recorded strong growth in Spain, exceeding 10,000 million euros spent by Spaniards.
The president of Marcas de Restauración, Alejandro Hermo, explained how the year went for the category. “2023 began marked by inflation, but the situation has been improving and it is being a very good year and better than expected in terms of sales,” he said. “The lost profitability has not yet been recovered, even though the cost increase has been mitigated with price increases and the search for efficiencies. The realistic objective is to reach the pre-inflation profitability level in two or three years,” he said.
6 out of 10 chains will grow by more than 10%.
According to the survey conducted by KPMG, six out of ten restaurant chains expect their sales to close 2023 with a growth of more than 10%, and a similar percentage (52%) estimate that they will also increase their turnover by double digits next year. This growth will be driven by an expansionary policy, since 91% of operators say they will open new stores next year, while 83% of chains plan to increase their staff in 2024 due to their growth.
The report shows that technology is among the top three investment priorities for the branded foodservice sector in 2024 and will be used to enhance customer relationships and drive efficiency gains. Thus, 73% of the groups surveyed plan to incorporate technology for customer personalization and loyalty. Other uses will be the digitization of on-premise orders (52%), consumer insight and demand forecasting (48%), price and promotion optimization (45%), support process automation (39%) and reservation management (36%).
The emergence of generative artificial intelligence could accelerate some of the sector’s digital transformation actions. Fifteen percent say they have already incorporated it into their business and 30% plan to do so in the near future.
Inflation, the main challenge for 2024
The survey shows that the increase in inflation will be the main threat for most companies, both for its impact on business profitability and for its possible effect on sales, due to the risk of contraction in demand due to the loss of consumer purchasing power. They also point out that the availability of personnel is another major challenge for the sector.
Thus, 97% of the restaurant chains state that their margins have declined due to inflation as a result of higher costs than prices, largely because the companies have cushioned inflation by absorbing part of these cost increases so as not to pass them on in full in the price.
This pressure could continue in the coming months, as restaurant chains estimate that their main cost items will increase or remain at current levels. In this situation, seven out of 10 companies plan to increase their prices in the coming months, and the same proportion (73%) expect to revise their prices two or three times a year.