Press Release
THE SANDWICH INDUSTRY REPORT 2010
The UK sandwich industry has fared well through recession, despite some trading down and tightening of belts by some retailers, says a new Report to be published by the British Sandwich Association in May to coincide with British Sandwich Week May 9-15).
Overall, the market has grown by 3.6% in the last year to reach a value of over £6 billion, with volume sales up 4%. However, average prices being charged by some retailers are little more (and in some cases lower ) now than they were in 2007 despite food cost inflation of around 10% and a 4% rise in general inflation since then.
While some of this is accounted for by retailers launching ‘recession busting’ ranges in response to consumers trading down in response to the economic downturn, the Report questions whether some retailers ‘pre-empted’ a shift in the market by launching cheaper ranges in anticipation of consumers wanting to cut costs.
“The fact that ranges on shelves changed may have been a direct cause of some down-trading,” says the Report. “As a result it is difficult to determine how much has been driven by consumers themselves as opposed to retailer reactions.” However, it says that while this may be understandable in recession, the industry needs to take care that it does not result in consumer perceptions of the quality and value for money becoming undermined.
The Report particularly highlights three key concerns for the industry – product blandness due to reductions in salt and fat content in some ranges, resulting from a response to Government pressures; the lack of innovation due to cutting back on new product development budgets; and reduced consumer choice as a result of restructuring of shelves, particularly by some multiples.
While the Report says that the sandwich bar market has generally done well through recession with some consumers trading down from eating out in restaurants, it says that the collapse of some franchise chains is not reassuring for investors. However, it says that there is still scope for the development of more sandwich bar chains.
In the manufacturing sector, the Report says that the market is now mature and that it believes it is increasingly difficult for middle-sized businesses to compete, although there remains scope for small local businesses. The tendency, however, will be for manufacturers to devote increasing resources to automation in order to manage costs, particularly if factors such as the minimum wage continue to rise.
The real challenge for the commercial industry in the future, however, will be how to persuade consumers to switch away from making sandwiches at home. It says this will take a concerted effort by the industry, with convenience and choice likely to be the key drivers.
The Report, which costs £975 + VAT for members (£1250 + VAT for non-members), can be obtained from the Association by completing and returning the form below.
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For further press information please contact BSA Director Jim Winship on 01291 636331 or 07850 104034
The British Sandwich Association is the trade body representing the sandwich industry both in the UK and overseas, including both commercially made sandwiches and the ingredients used for making sandwiches in the home. The commercial sandwich in the UK employs in excess of 300,000 people in the UK.