BUSINESS STRATEGY THE CATERING SECTOR INTERNATIONAL HOSPITALITY MANAGEMENT Group th November 2001 BECKY DEADMAN, KATY EAGLE, LISA GALLAGHER, LAURA WALTON

Format of Presentation General Catering Sector - specifically looking at Fast Food What is Fast Food? An analysis of the market and competition with analytical tools Discuss external factors that affect the fast food sector Consider stakeholders Look into the future and forecast of the fast food market Conclusion

IN-STORE RESTAURNATS PUB CATERIING INDEPENDENT & CHAIN RESTAURANTS OTHER CATERING FAST FOOD HOTEL CATERING ROAD SIDE CATERING THE CATERING SECTOR

26% 22% 5% 2% 17% 6%

General Eating Out Trends The eating out sector has increased 32% between Higher Disposable Income Demand for Value For Money

FAST FOOD Food which is prepared and served quickly to customers on order Food may be takeaway or eat on premises In general Fast Food is collected from a counter, not table service Relatively cheap food Convenient

Fast Food Includes……. Burger Bars e.g, McDonalds and Burger King Pizza Restaurants, Takeaway and Home Delivery Outlets Pasta Chains e.g, Bella Pasta Chicken Chains e.g, KFC Fish and Chip Shops Ethnic Takeaway Other Fast Food e.g, Jacket Potatoes, Sausages, Vegetarian Specialists and filled croissants

Key Markets Burgers Pizzas Fried Chicken Juice Bars Pasta Sandwiches Jacket Potatoes Ethnic Takeaway TraditionalNew emerging markets Organic Specialities

Growth of Fast Food Market Domination of eating out sector Consumer spending doubled over the last 10 years

Market Structure Large Scale Characteristics Key Features

Market Environment Ease of Entry to Market High Failure Rate Competitive

Fast Food Customer Trends Core Market - Young, Social & Affluent Elderly & Cash Constrained Family Market Regional Differences Similar throughout the UK North/ South divide Reasons for differences

High Low GROWTH Low MARKET SHARE BOSTON CONSULTANCY GROUP MATRIX Ethnic takeaways Sandwich shops McDonalds Burger King KFC Pizza Hut Yo! Sushi Wimpy Harry Ramsdens Wendys

PORTERS FIVE FORCES MODEL - FAST FOOD Competition/ Rivalry New FF restaurants Existing FF restaurants serving different types of fast food. Potential entrants Ease of entry into market. Buyers- Customers Have so much choice that they can now demand value for money and have bargaining power. Suppliers As a new company suppliers have the bargaining power over the companies. However if there are ample suppliers then the companies are able to choose. Substitutes Increased ‘pub’ restaurants which are good value for money. Retail food e.g.. Marks & Spencer's

Factors Affecting the Catering Sector Political The Governments reaction to Food Scares The encouragement of healthy eating Government encouragement for families to sit round the table Government legislation on employment

Economical High property and operating costs Increase in taxation

Social Increase in the young eating out Lifestyle changes Smaller fast food outlets have a reputation for poor hygiene

Technological Drive through Advertising and ordering on the internet Improved cooking techniques and facilities

Environmental Decrease in inbound tourism Foot and Mouth disease BSE crisis September 11 th 2001 – Terrorist attacks

Stakeholders Customers Community Competitors Employees Suppliers Government Owners & share holders Financial lenders

The Future Forecast of the Eating out market Source: Mintel Report - Eating Out Review. 18/06/2001

The Future Fierce Competition Keep prices down Consumers demand better quality of food & service and value for money

The Future Personal Disposable Income (PDI) The socio-economic status of the population The structure of the UK population Families will still remain a very attractive market to target

The Future New sales opportunities through the internet A “gap” in the children’s vegetarian market The concept of healthy fast food

Forecast Pizza restaurants - key area:delivery Chicken & Burger bars - the market appears to be saturated Ethnic takeaway - Chinese & Indian remain popular but new competition from other ethnic cultures Fish & Chips - remain an old favourite but new fish bars may start to compete

Conclusion Easy to enter but hard to succeed Highly competitive, diverse and large market Growth markets are new ethnic takeaways Move towards healthy eating such as sandwich shops Positive outlook for the future

Thank-you for listening. Any Questions?