Rising corporate profit and per capital disposable income will boost demand for catering services, contributing to further growth in prices.
Los Angeles, California (PRWEB) January 13, 2014
Banquet and catering services have a buyer power score of 3.8 out of 5.0. This score reflects positive market conditions that result in high purchasing power for buyers. One of the factors allowing for high buyer power is the banquet and catering service market's low level of market share concentration. "Competition is high among the 11,000 suppliers that provide these services," according to IBISWorld procurement analyst Erich Abellera; therefore, one factor through which suppliers can differentiate themselves is price, resulting in a wide range of available prices for buyers. Because catering services generally have a low level of specialization, buyers have a variety of options, and they will easily find a supplier that meets their pricing criteria.
Although the average price of banquet and catering services is estimated to increase during the three years to 2013, price growth is not expected to be rapid. "Prices are also anticipated to have little volatility during this period," says Abellera. Suppliers do face some risk in their supply chains; purchasing costs make up a large portion of market revenue, and the cost of food inputs, such as meat and vegetables, fluctuates based on supply. Fortunately for buyers, suppliers can absorb rising input costs or tweak menus to use low-priced ingredients. As a result, buyers face little risk of banquet and catering prices spiking suddenly.
In the three years to 2016, prices for banquet and catering services are projected to increase at a slightly faster rate compared to the previous three years. Nevertheless, buyers are expected to continue benefiting from relatively strong negotiation power. The highly fragmented market will continue to encourage price-based competition, giving buyers a wide range of prices to choose from. Major suppliers include Centerplate Inc., Sodexo, Aramark Corporation and Compass Group PLC. Suppliers generally have healthy profit margins, which give buyers room to negotiate prices down. Typically, suppliers are willing to reduce prices to win and retain clients. In addition, switching costs are low; buyers can easily find new suppliers without incurring added costs. This factor gives buyers greater leverage when purchasing banquet and catering services.
For more information, visit IBISWorld’s banquet and catering services procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of banquet and catering services. Caterers provide food services for single events or through banquet halls with catering staff. Providers all offer on-site preparation and meal transportation services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.