Burgers may be growing ever bigger nowadays, but can the same be said for businesses in the food and beverage industry behind these finger-licking creations? Not according to the findings of our 2016 Business Census. Our survey of business leaders found that the industry experienced the lowest growth of any of the eight sectors surveyed.
45% of food sector businesses stated that their company had experienced either flat or no growth during their last financial year. This was 10% more than the second most stagnant industry, retail. Over 1,000 business professionals responded to the survey, providing insight, predictions and comment on the state of their company at the start of 2016. They also answered questions about the biggest challenges they faced in 2015.
“It’s unsurprising that recruitment remains a top concern, with an increase in reported political uncertainties such as the impending EU referendum and the growing security concerns both impacting on companies’ ability to attract and retain staff.”
Alastair Campbell, co-founder, Company Check,
According to respondents from the food and beverage industry, it was finance that posed the biggest challenge for food and drink businesses in 2015, with the economy (26.32%) and recruitment (21.05%) also being cited as having had a possible impact on growth. The issue of finance was further discussed in comments from respondents, with one stating that, “Finance [is] difficult to obtain and grant funding non existent unless for training, which isn’t required.”
Predictions for 2016 tell much the same story, but reveal increased concerns over politics, with 7.89% of respondents citing this as their company’s biggest challenge in 2016; an increase of more than 2.5% year on year. The majority of food and beverage industry professionals surveyed continue to predict that finance will remain the biggest challenge for their company in 2016 (28.95%), this was closely followed the economy (23.68%), a topic which also prompted additional comment from a number of industry professionals ‘on the ground’, including:
“My business is reliant on consumer spending in the on-trade hospitality sector, which is one of the first places for consumers to cut back spending in a downturn. However, we have benefited much from improved exchange rates vs the Euro, somewhat from cheaper fuel prices and we have found ways to cut our import prices.”
Recruitment remains the main concern for over a fifth of businesses in this industry, and when Company Check asked industry professionals to expand on their predictions, it was the political concerns of the upcoming rise in the National Living Wage and a potential ‘Brexit’, that were the hot topics.
Craig Allen, Co-founder, The Change Group, said: “Undoubtedly, the increase to the National Living Wage will have both a positive and negative impact across the whole of the hospitality industry well into the future. Inevitably there is a fear that jobs could be lost due to businesses slimming down their workforce to save money or else they will pass the cost on to the consumer by raising prices – which in turn could put people off visiting, also resulting in potential job losses, creating something of a vicious circle.
“But, it’s not all bad news: The National Living Wage will of course improve the lives of workers and we all know that a happy workforce is a good workforce. It could also improve staff retention for low-skilled jobs and attract more people to consider a career in hospitality due to the higher pay rates.”