Cafes and Takeaways

Sector Payment Analysis: cafes and takeaways

Our detailed review of payment behaviour within the cafes and takeaways sector, encompassing a sample size of 182 companies, reveals a distinct dichotomy between average statistical data and typical operational reality. At first glance, the arithmetic mean payment time of 52.9 days suggests a relatively sluggish payment culture. However, a closer examination of the data indicates that this figure is significantly skewed by extreme volatility. The median payment time stands at a much more respectable 38 days, which serves as a far more accurate centre point for expectations within the industry. The massive standard deviation of 123.9 days is the critical metric here; it highlights a dramatic disparity in settlement practices, suggesting that whilst the majority of firms adhere to standard terms, a minority of erratic payers are severely distorting the sector’s average performance.

When we analyse the distribution and quartile data, it becomes evident that the core of the cafes and takeaways sector is relatively stable. The interquartile range is tight, spanning just 20 days (from 26 to 46 days). This demonstrates that the vast majority of businesses have organised their financial operations to settle invoices within a predictable window. Specifically, 74.2% of the analysed companies pay within 45 days, with the 25th percentile clearing debts in as little as 26 days. This cluster of moderate-to-fast payers suggests that liquidity is generally available amongst established firms, and operational efficiency is favoured by the bulk of the market participants. Only a small fraction (15.4%) falls into the 'slow' category of 46–60 days, reinforcing the view that the median performance is the most reliable benchmark for credit controllers.

Despite these positive indicators, suppliers must realise the potential risks associated with the sector’s "long tail" of poor performers. The data shows that 12.3% of companies take over 60 days to pay, and the incidence of late payments is notably high at 28.2%. The extreme variance is best illustrated by the outliers: whilst 30 top-performing companies settle accounts in under 20 days (with the fastest at 6 days), the worst performer took an extraordinary 1000 days to pay. This single extreme outlier significantly impacts the mean calculation. Consequently, credit risk teams should not rely solely on averages but must scrutinise individual payment histories, as the gap between the fastest and slowest payers is immense.

Geographically, the data is heavily centred on the south of the UK, with London and the South East accounting for over half of the dataset (93 companies combined). This regional weighting may influence the perceived speed of payments, as capital-centric businesses often possess different cash flow dynamics compared to regional counterparts in the North West or East of England. In conclusion, whilst the cafes and takeaways sector generally demonstrates moderate payment habits with a tendency towards 30-45 day terms, the significant standard deviation and the 28.2% late payment rate necessitate robust credit control procedures. Suppliers generally need not fear systemic delays, but they must remain vigilant against the minority of critical outliers that could disrupt cash flow.