Catering Profit: How to Increase Your Earnings
Introduction
As the catering industry in the UK continues to grow, savvy business owners are searching for ways to boost their profits and stay ahead of the competition. With the global catering market projected to reach hundreds of billions of pounds and the US market seeing strong growth through 2030, the opportunity for increased catering profit is ripe for the taking.
Key Takeaways
- Catering checks can be 10 times larger than regular restaurant orders, making it a lucrative revenue stream.
- Improving catering margins by just 2-5 percentage points can translate to tens or hundreds of thousands in additional profit.
- Effective menu engineering and targeted marketing tactics can significantly boost average order value (AOV).
- Operational excellence and a sharp focus on key performance metrics are essential for maximising catering profit.
Optimizing Catering Profit Margins
Typical restaurant net profit margins range from 3-5%, with top performers around 8-10%. However, well-managed catering operations can operate on similar or slightly better margins. The key is closely monitoring the core cost buckets, which include food cost (target 25-30%), labour (target mid-20%), overhead, and variable costs like packaging and delivery.
Poor inventory control, over-portioning, and inefficient labour scheduling can quickly erode catering profit. By implementing detailed checklists, standard operating procedures, and investing in appropriate equipment, caterers can prevent costly mistakes and maintain a high level of service quality.
Increasing Average Order Value (AOV)
Catering orders typically serve larger groups of 10-50+ guests, making upselling extremely powerful. Adding premium options, such as protein upgrades, dessert trays, and beverage packages, can increase AOV by 10-30%. Bundling offerings and using “per head” pricing makes higher spend feel natural and transparent to clients, while also driving up profit margins with high-margin add-ons.
Menu Engineering for Profit
To maximise catering profit, focus on “workhorse” dishes with good holding quality, low waste, and favourable food cost, such as pastas, grain bowls, and build-your-own bars. Use menu annotations like “chef’s picks” and “best value” to guide customers toward high-margin choices, and regularly review the catering menu to identify “stars” to promote, “puzzles” to reprice, and “dogs” to retire.
Targeted Marketing and Sales Tactics
Rather than casting a wide net, focus your marketing efforts on attracting high-value, repeat clients like corporate accounts. Use SEO and content marketing to target keywords around “office catering,” “[city] corporate catering,” “wedding caterer,” and other relevant searches. Employ sales tactics like outbound outreach to office managers, HR teams, and event planners, as well as sampling lunches for target accounts and referral programs.
Conclusion
By implementing a strategic approach to catering profit optimisation, catering businesses in the UK can unlock significant revenue and margin growth. From implementing operational excellence and service quality to utilising targeted marketing and sales tactics, the path to increased catering profit is clear. With the right focus and execution, catering operators can position themselves for long-term success in this rapidly expanding industry.
Sources:
National Restaurant Association
Sculpture Hospitality
Lunchbox
Itsacheckmate
Curate
