Editor’s view: Change can come quickly in the catering equipment supply chain

Andrew Seymour grayscale

The returning interest of private equity investment in the UK restaurant sector has been well-documented over the last 18 months, but could we be on the verge of a more pronounced period of consolidation in the days ahead?

Obtaining finance for deals is becoming easier and consumer spending power is heading in the right direction again — both are key ingredients for driving the sort of changes that would herald a reshaping of the landscape.

Larger eating-out operators hungry for expansion are, predictably, being tipped to satisfy their appetite by targeting smaller players open to approach. Analysts think the next 12 months could see a real land grab among those with the deepest pockets. And once one has showed their hand, it is inevitable that others will follow.

Foodservice industry research firm Horizons suggested last month that as organic growth becomes more difficult for some established brands, acquisition offers an attractive route into new sub-sectors of the industry and an instant boost to the top line.

“The larger players are now at the point where they will start to ask where further growth will come from,” it said. “The eating out market in some sectors is reaching saturation and overseas expansion is difficult for most, so acquisition through 2015 and into 2016 is the obvious answer.”

If the big M&A rush does materialise, it will have fascinating implications for the purchasing and procurement of foodservice equipment among the groups involved.

The coming together of separate companies will provide those groups with new opportunities, news way of doing things and exposure to new concepts. But it will also bring an inevitable sense of uncertainty and the prospect of operational change.

Either way, the catering equipment supply chain must be prepared to contend with the changing dynamics of these rapidly shifting sands.

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