Catering equipment suppliers spooked by turbulence facing restaurants

The mood of the catering equipment industry has swung dramatically from 2017 to 2018, with many more companies feeling that the economy will struggle in the next 12 months, according to the latest CESA Business Barometer.

It’s surveyed members at the end of Q1 2018 and discovered a change in priorities in terms of what businesses are most concerned about. At the end of 2017 it was price increases and inflation, but those have now switched to reduced consumer demand.

The timing of the survey could have something to do with this outlook – the first quarter of the year was particularly turbulent for the end-user market, with the likes of Byron, Jamie’s Italian and Prezzo all announcing CVAs.

Glenn Roberts, chair of CESA, said: “Heading into 2018 there was an optimism about the economy. However, this changed significantly after Q1, with only 14% of respondents seeing a positive outlook.  Nearly 50% of respondents said they thought economy would not do so well over the coming year – compared to just over 20% in Q4 of 2017.”

There’s less optimism around their own business prospects, too.  40% of companies are nervous or pessimistic about business turnover in the next year – compared to 24% in Q4 2017.

Reduced consumer demand jumped from number five to number one in the list of major business concerns.  Uncertainty over the UK’s role in Europe remained at number two.

Interestingly, raw materials prices dropped out of the top five altogether – perhaps because by now the worst has already happened.  It was replaced by the need to retain the best people.

In terms of the priorities for the UK’s negotiations over Brexit, the derogation from the Working Time Directive remains respondents’ number one objective, with reduction of the UK’s payments to the EU budget at number two.

Reduced regulations saw the biggest jump, moving from second to bottom in Q4 2017 to third from top in Q1 2018. Standards, access to skilled workers, free movement of people and access to the single market all feature as key priorities, too.

“It’s not all doom and gloom, but it’s certainly a holding pattern,” added Mr Roberts. “For example, while fewer companies expect orders from the UK and overseas markets to increase, more expect them to remain the same. The same is true of staff numbers, capital investment and R&D. We’re not going backwards, but we’re certainly slowing down.”

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