Funday best
Cuisine and Dreams, a new sandwich bar in Sutton, is proving to be a nightmare for the Sutcliffe-employed catering staff at Reed Business Information.
They are losing valuable business to the small outlet, which specialises in freshly made sandwiches. But now, the contract catering giant claims to be offering its people a weapon to fight competition from the high street. It is a promotion called Summertime Fundays, a customer loyalty scheme that rewards people if they eat in their work canteens.
RBI is just one of 1,600 Sutcliffe units where the promotion is being staged. The company is one of the Surrey town's biggest employers and, coincidentally, is publisher of Caterer & Hotelkeeper, along with a host of other trade publications serving all industries from poultry farming to aviation.
Pam Chart, Sutcliffe's catering manager at RBI, is sanguine about the competition, claiming the sandwich bar is no more a threat to the viability of her contract than any other of the 67 catering outlets within a one-mile radius of Quadrant House. "People want to get away from the office at lunchtime, and I can't say I blame them," she comments.
Chart sees more of a threat in the weather conditions. If it rains, then most of the 1,500 people in the building are inclined to eat in, and Sutcliffe's restaurant and snack bar are swamped. If it's sunny, the restaurant's takings dip dramatically.
Given the nature of RBI's business, the on-site catering staff can also see a drop in business if there is a major trade show on in the UK. If it is a travel show, most of the staff from the travel trade-related publications disappear for the day. If there is an agricultural event, most of the staff from the farming titles are out.
The launch of Summertime Fundays is clear evidence that Chart's relaxed approach to the peaks and troughs in the contract catering business is not shared by the management at Sutcliffe. The promotion, which has cost the company £200,000 to set up, has a clear target - increasing sales through its catering units by an average 10% over the six months from its start on 28 April.
To achieve this, catering managers have to persuade existing customers to remain loyal, and perhaps eat more often in their staff restaurants. Those people who would normally leave the office to buy their lunch from a local sandwich shop or elsewhere have to be persuaded to stay in.
For Sutcliffe's clients, the promotion is good news. If it meets its target, the increased volume of business through the restaurants means more money in the till and, as a result, more chance of being able to reduce catering subsidies by a significant amount.
Summertime Fundays works by giving customers tokens in return for buying meals or snacks. These can be redeemed against a choice of offers, ranging from free meals to discounts off P&O ferry fares. Over the six-month lifespan of Summertime Fundays, customers are being given the opportunity to earn double tokens by supporting a series of food promotions run by the numerous suppliers supporting Sutcliffe.
Included in the line-up of these suppliers is the Seafish Authority, which is given a platform to encourage more people to eat seafood. Similarly, the Meat and Livestock Commission has a slot to promote beef, lamb and pork. On another day, diners could earn bonus tokens by buying a bread roll with a Flora portion, or a cup of tea and a Kit-Kat.
Sutcliffe's director of food service support, Ian Crabtree, expects that such support from suppliers will mean that 80% of the cost involved in mounting Summertime Fundays will be picked up.
In putting together the selection of rewards, Sutcliffe has made full use of its membership of the Granada group family. Virtually all the offers are for redemption at a sister company to Sutcliffe. Examples are reduced admission to tourist attractions such as Granada Studios in Manchester or The World of Coronation Street in Blackpool. They are happy to offer discounted entry because they know, once they get customers through their gates, that they have the opportunity to earn revenue from sales of food, beverages and merchandise.
Other Summertime Funday offers are free meals at Little Chef outlets and Granada self-service restaurants at motorway stops. There are also 10% discounts off Forte UK Leisure Breaks. One of the few non-Granada offers is from P&O Ferries, which is offering as much as £100 off sailings to Bilbao.
Crabtree says that Sutcliffe is keen to keep the rewards "in the family". He says: "I have had a large number of companies knocking on my door over the past four weeks to offer redemptions. We will be doing research in July and August, and if customers say the redemption opportunities were not wide enough, then we would look to go to outside companies."
The amount people need to spend to earn tokens varies by unit. According to Crabtree, the figure is based on the average spend, which can range from £1.50 right up to £3.75 at the commercial units where there is no subsidy.
Nominated amount
At Quadrant House, RBI is working toward a target of nil-subsidy this year for the first time. Last September, meal prices rose steeply and, as a result, the nominated amount staff have to spend to get a token is £3. Crabtree acknowledges that this is high but adds that Sutcliffe was careful not to make tokens too easy to get: "They become like lira and have no value, and people switch off."
Redemption levels are also set at an achievable level. It would not take too long to earn the 10 tokens to get a free meal, worth £4.99 at a Little Chef.
Though it is early days yet, Crabtree is getting reports of sales increases of between 3% and 9% from some units. He says: "Month one is always the slow month, as the momentum picks up and customers start buying into the loyalty scheme, but that is well ahead of our projections. We would expect to see those figures increase over months two, three and four."
Meanwhile, at Quadrant House, Chart is also positive about the promotion. Though she has no figures yet to see whether food sales have increased, she thinks that the fact so many promotional cards advertising the offer have disappeared from the restaurant is a good sign. "People must be taking them up to their offices to remind themselves of what the offers are," she says.
The queue outside Cuisine and Dreams doesn't look any shorter, but if Sutcliffe has its way, over the coming months some of its customers will be persuaded to forgo their freshly prepared sandwich for a canteen meal that comes with a bonus.
