“Challenging” conversations between cultural venues and their contract caterers are likely to be taking place as the lockdown is eased, warns a new report published by the Association of Cultural Enterprises.
Contracts are likely to be re-negotiated, with some suppliers attempting to end contracts that won’t be financially viable, and some cultural venues deciding to close their catering provision for a period of time.
The report points out that, to achieve break-even, contract catering companies often need around 70% occupancy, so with most venues are expected to be operating at only 25-50% of capacity, caterers that continue trading are likely to be under severe pressure. Volatile food prices and extra costs for using disposable goods and buying PPE will reduce already squeezed margins. Offering takeaway food is unlikely to make trading any more viable.
In house catering teams may be keener to ‘get something going’ and maintain a catering presence, the report says. Venues are looking at all available space to extend trading opportunities, though financial investment may be needed to develop new catering concepts and an adapted offer.