After a recessionary slowdown, spending on catered parties is back on the rise
Los Angeles, CA (PRWEB) May 03, 2012
The recession caused people to put away their party hats and tone down their celebrations. In response to the downturn in the economy, people were having fewer and less extravagant functions, which reduced demand for caterers, says IBISWorld industry analyst Nima Samadi. From 2007 to the onset of the recession in late 2008, though, the Caterers industry was the toast of the town. The number of establishments was quickly rising, and savvy entrepreneurs were opening banquet halls to cash in on the growth expected by the industry. More venues began to demand catering services since people were expanding their ideas of interesting places to throw a party. As demand for catering services increased, customers were increasingly asking caterers to perform functions outside their normal scope of responsibilities, Samadi said. In addition to food and drinks, customers began demanding decorating, lighting, music and entertainment and even flower arrangements. Caterers and banquet halls had to be willing to offer a one-stop solution to stand out against their competition.
Despite pre-recession growth, Caterers industry revenue fell at an estimated average annual rate of 0.7% in the five years to 2012. As unemployment rates increased and consumer spending rates plummeted during the downturn, the strong growth the industry was experiencing ground to a halt. Employment levels were slashed and establishments began exiting the industry. These declines even offset the growth in employees and entrants during the boom years. Over the five years to 2012, the numbers of employees declined and the number of establishments fell. Revenue declined in 2008 (2.2%) and 2009 (11.3%) as demand for industry services plummeted and consumers and businesses had less money to spend on catering.
Industry performance turned the corner in 2010 and 2011, however, with revenue having grown 4.5% to $6.2 billion and 3.2% to $6.4 billion, respectively. That growth is expected to continue over 2012, with revenue growing 3.3% to $6.6 billion. As consumer spending rates continue to grow and corporate profit fattens, industry revenue is expected to grow over the five years to 2017. For more information, visit IBISWorld’s Caterers in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes companies that provide individual event-based food services. These companies generally have equipment and vehicles to transport meals and snacks to events or prepare food off-site. Banquet halls with catering staff are included in this industry. Examples of events catered by establishments in this industry are graduation parties, wedding receptions, business luncheons and trade shows.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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