UK Contract Catering Booms After Double-Digit Growth in Q3 2025

Britain’s contract catering sector has recorded another outstanding quarter, with sales rising 12.2% year-on-year in Q3 2025, according to the latest Contract Catering Tracker produced by CGA by NIQ, Bidfood and UKHospitality. The results mark one of the strongest quarterly performances for the industry since the post-pandemic recovery began in mid-2021 — and signal sustained momentum at a time when many other hospitality segments are facing stagnation or decline.

For businesses, investors and public-sector organisations relying on contract catering services, this report offers key insight into sector resilience, commercial trends, and future regulatory considerations. Below, Parachute Law examines the figures, interprets their significance, and outlines the likely impact on corporate procurement, workforce management and supply-chain compliance.

1. Double-Digit Growth Extends a Four-Year Recovery Streak

The Q3 2025 growth figure of 12.2% continues a pattern of uninterrupted expansion across the sector since 2021. It also accelerates the year’s earlier growth rates:

• 8.0% in Q1 2025
   
• 9.5% in Q2 2025
   
• 12.2% in Q3 2025
   

Rolling 12-month sales (MAT) have now risen 9.7%, underscoring sustained market momentum and renewed confidence among corporate clients, educational institutions, healthcare providers and public-sector partners that make up the bulk of contract caterers’ customer base.

Why sustained growth matters legally and commercially

Continuous growth creates:

• Stronger foundations for longer-term service contracts
   
• Greater leverage for caterers negotiating pricing structures
   
• More investment into ESG-driven procurement
   
• Pressure on suppliers to scale sustainably
   
• Increased regulatory scrutiny around workplace conditions, food safety and supply-chain transparency
   

The figures highlight a sector no longer in recovery mode, but in a phase of strategic expansion.

2. Expansion Is Not Just Revenue-Driven — Outlets Are Increasing Too

The Tracker also reports a 1.4% increase in the number of outlets served by leading operators compared to Q3 2024.

This matters because outlet expansion is often a stronger indicator of structural health than revenue growth alone. More sites typically mean:

• New multi-year commercial contracts
   
• Increased demand for staff, compliance checks and food-safety controls
   
• Capital investment in kitchens, equipment and digital ordering
   
• Scale-driven efficiencies — but also rising regulatory obligations
   

For many contract catering groups, outlet growth is a sign that the hybrid working environment has stabilised and that B2B customers are increasingly confident in long-term workforce patterns and service needs.

3. The Contract Catering Tracker — Why It Matters to Businesses

Compiled by CGA by NIQ, Bidfood and UKHospitality, the Contract Catering Tracker is one of the most authoritative sources of sector performance data. It aggregates sales from major operators and analyses year-on-year trends across site types, contract formats and consumer behaviour.

For businesses, the Tracker provides:

• Benchmarking data to measure performance against market averages
   
• Evidence to support procurement strategy or budget allocation
   
• Forecasting insights ahead of tendering cycles
   
• Indications of future workforce or operational pressures
   

Participation in the tracker also provides contributors with deeper quarterly insights — something many large operators rely on for strategic planning.

4. Industry Reactions: Confidence, Creativity & Consumer Value

CGA by NIQ: “Demand remains high despite cost pressures”

Karl Chessell, director of hospitality operators and food (EMEA), said contract caterers have “substantially outperformed Britain’s hospitality sector in recent years.”

He emphasised:

• Strong organic sales growth
   
• A steady increase in new contracts
   
• High demand despite cost-of-living and inflation pressures
   

Chessell believes the sector enters the busy Christmas season “with high confidence,” though he stresses the importance of not becoming complacent in a challenging cost environment.

Bidfood: “Relevance, creativity and healthy choices are driving success”

Debra Morrell of Bidfood said resilience and value delivery were the two key drivers behind ongoing sector momentum. She highlighted several consumer behaviour shifts:

• Hybrid working is stabilising rather than declining
   
• Employees want higher-quality on-site food
   
• Flexible service times are increasingly essential
   
• Healthy, sustainable and innovative menus are becoming standard expectations
   

Her comments reflect broader UK trends: food quality, provenance and dietary transparency play a significant role in workplace satisfaction and employee retention.

UKHospitality: “Growth could accelerate if the tax burden is reduced”

Kate Nicholls praised the sector for performing “remarkably well” despite energy costs, wage pressures and tax obligations.

Nicholls argues that the sector’s potential remains under-realised because of the current tax framework, signalling that the upcoming Budget could determine growth trajectories for the next several years.

5. What’s Driving the Boom? Five Key Factors

The double-digit surge in contract catering sales can be linked to several structural and behavioural shifts.

1. Return to Offices — but on New Terms

Hybrid working has stabilised into a predictable pattern. Corporate clients are:

• Funding subsidised meals
   
• Offering healthier food options as part of wellness initiatives
   
• Using food quality as a tool for office attendance incentives
   

2. Corporate ESG Priorities Are Reshaping Menus

Major companies are demanding:

• Lower-carbon catering
   
• Sustainable supply chains
   
• Healthier menus
   
• Transparent nutritional data
   

Contract caterers have adapted rapidly, turning ESG compliance into a competitive differentiator.

3. Higher Attendance in Education & Healthcare Sites

Schools, universities and hospitals remain the most consistent sites for contract catering growth, driven by:

• Stable footfall
   
• Long-term contracts
   
• Government-backed funding structures
   

4. Digital Ordering & Operational Automation

Technology adoption is accelerating through:

• QR code ordering
   
• Kitchen automation
   
• Inventory software
   
• AI-driven supply forecasting
   

These tools reduce staffing shortages and waste — two major operational challenges.

5. Shift Away from Self-Operated Catering

Many corporations and institutions have moved away from in-house provision to third-party contracts, due to:

• Cost pressures
   
• Food-safety obligations
   
• Workforce shortages
   
• The need for menu innovation
   

This outsourcing trend is expected to grow further through 2026.

6. Legal Considerations for Businesses Working With Contract Caterers

With rapid sector expansion comes increased focus on contract structure, supplier obligations, and regulatory compliance. Businesses engaging contract caterers should pay close attention to:

(1) Food Safety & Hygiene Regulations

Contract catering sits under:

• The Food Safety Act 1990
   
• The Food Hygiene (England) Regulations 2013
   
• HACCP requirements
   
• Local authority environmental health inspections
   

Growth in site numbers increases exposure to compliance challenges.

(2) Employment Law & Worker Rights

Contract caterers often rely on:

• A flexible workforce
   
• Variable hours contracts
   
• Seasonal or site-specific recruitment
   

Upcoming changes in employment rights may affect cost structures and contract pricing.

(3) Supply Chain Transparency

With ESG requirements rising, clients increasingly demand:

• Proof of sustainable sourcing
   
• Allergen transparency
   
• Carbon reporting
   
• Modern slavery compliance
   

These obligations often require new contractual clauses.

(4) Contract Negotiation & Tendering

Procurement cycles may need to incorporate:

• KPIs for sustainability and food standards
   
• Transparency obligations
   
• Penalty clauses for service failure
   
• Data protection compliance (especially with digital ordering)
   

(5) Health & Safety Responsibilities

Both client and caterer must clarify responsibilities relating to:

• Kitchen equipment
   
• On-site staff
   
• Fire safety
   
• Hazard control
   

Ambiguities in responsibility can lead to significant legal risk.

7. Risk Factors: What Could Slow the Sector Down?

Despite the strong performance, several risks loom over the sector.

High Input Costs

Energy, transport and food inflation remain volatile, and could weaken margins.

Taxation Pressures

Industry leaders emphasise that any increase in the tax burden could blunt sector momentum.

Labour Availability

Skills shortages in hospitality remain a long-term challenge, particularly as seasonal peaks approach.

Economic Uncertainty

Corporate belt-tightening could reduce discretionary spending on workplace food services.

Regulatory Changes

Updated food-safety and employment regulations could increase compliance costs.

However, the sector’s ability to innovate and adapt has already proven strong, giving operators a competitive advantage during economic instability.

8. Parachute Law’s Sector Outlook: Robust Growth, Rising Scrutiny

The Q3 data clearly demonstrates that contract catering is entering a period of structural maturity and commercial opportunity. But expansion brings heightened regulatory and contractual risk.

We expect:

• Continued demand from hybrid workplaces
   
• Increased pressure to demonstrate ESG compliance
   
• Greater scrutiny of procurement and supplier due diligence
   
• Contract lengths increasing, with stricter performance obligations
   
• A rise in disputes over service standards, staffing and nutrition claims
   
• A stronger focus on worker rights as employment reform accelerates
   

For caterers and clients alike, now is the time to ensure contracts, policies and compliance frameworks are fit for purpose.

Need Support With Catering Contracts or Compliance?

At Parachute Law, we advise:

• Corporate clients procuring catering services
   
• Contract catering providers negotiating commercial terms
   
• Schools, hospitals and public-sector institutions
   
• Hospitality groups expanding into new sites
   
• Businesses reviewing health & safety or food-safety compliance

Speak to our commercial and regulatory team today for clear, practical advice on sourcing, scaling or managing contract catering services.

Contact Us Now

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