Linda Halliday, chair of the association’s Food and Service Management Forum, said the large staff restaurant with its traditional menu was coming under increased scrutiny from clients who wanted to save money and put the space to other use.

To meet the pressure, she said, contract caterers were introducing smaller snack bars, deli bars and café outlets “as well as specialist branded bars that serve a more restricted but more specialised range of quick snacks.”

The survey shows that turnover in 2002 increased by 5% to £2.69b, while the number of outlets grew from 18,513 to 19,342, caused mainly by a rise in the number of state school contracts. Meal numbers rose by 3% to 1.59 billion.

The number of contracts involving an element of risk for the caterer has risen to 70% of the total, while the number of in-house branded outlets has grown from 8,537 in 2001 to 9,219 in 2002.

The number of high-street branded outlets also rose, from 366 to 430.Despite the growth in 2002, the association said there were clouds on the horizon. These included trade union opposition to outsourcing, which the BHA said was growing stronger, and the recent decision to end the so-called “two-tier workforce”.

This will mean that when a private contractor takes over a government or local authority contract, not only will it have to honour the existing terms and conditions of staff, it will also have to grant the same terms and conditions to new staff recruited after the transfer.

The number of contracts involving an element of risk for the caterer has risen to 70% of the total, while the number of in-house branded outlets has grown from 8,537 in 2001 to 9,219 in 2002.