The chief executive of contract caterer Elior UK is confident that deserted offices will regain their workers and that rethinking the business' offering is key to tempting cautious customers back. Chris Gamm speaks to her
How many of your sites have reopened?
The majority of sites are open, and a good amount are open in healthcare and education. Business and industry is slowly but surely opening up, but there is very little turnover. We're quite lucky that we operate in a number of sectors, which means we have more sites open than some of our competitors. We used to be in that position before the acquisition of [education caterer] Taylor Shaw and [care home caterer] Caterplus, but every week it's growing and concession sites are opening too. We're hoping staycations will help with heritage sites, and we're starting to get some traction.
What impact has the number of people working from home had on business?
We won't have many people throughout August, with the holiday effect and furlough still in force. Towards September and October, we'll start to see something closer to normality, whatever that is.
I'm aware of companies in our portfolio that are not bringing people back until January. It depends an awful lot on there not being spikes of infection caused by returning to offices.
London is tricky due to the importance of public transport, and it's the one I'm watching most as it's where most of our sites are. The pressure is on for the City to reopen. The streets have been absolutely empty for the past few weeks. Regional business will get back quicker, with the exception of areas experiencing local spikes.
The prime minister has put the onus on employers to get staff back to the office. What sort of conversations are you having with customers? How willing are they?
I'd like them to open straight away, but you've got to go with expectations. It would be a game-changer if we get a drug or vaccine this year. People are scared and I don't blame them. We need to get confidence back and the overriding absolute is we've got to keep everyone safe.
We're in the hands of other companies – it was a shock to realise that reopening is down to the employer. It's a whole new way of thinking. It's given us a target and I believe clients are thinking along the same lines. But I am hopeful and preparing for a sudden rush of openings.
We're in the hands of other companies – it was a shock to realise that reopening is down to the employer
I use my own offices as a measure. How do I feel about it? Although I feel confident about asking if people want to come back, I can't say they must come back. I've told them that ‘the office is Covid-secure and ready for you'.
We've all been living and breathing the pandemic. As a manager, it's the hardest thing I've ever done. There's no one on the planet who can solve it. You just want to do the right thing.
At what point do you see business returning to normal levels?
Care homes and hospitals are pretty much full speed, with the exception of those not open to visitors. At the other end, with home working, B&I may never come back completely. We believe the majority of our sites will return, but it will take a while, maybe more than a year.
I work in the office daily, but even I think it will be normal to probably work a day or two at home a week. I'm not sure I'll do it though, as I like to get out and see customers. You can't run a business from a bedroom and there's something inherent in business growth where you need teams together. It's hard for new recruits to really start with us; to get under skin of what we're about, and that doesn't happen at home. The cement that brings us all together is a bit thin right now.
I think there will be an element of working from home, but it won't be devastating as far as contract catering is concerned, even though it's taking a long time to get fired up again. We're at the tipping point and we need people back in offices.
We're at the tipping point and we need people back in offices
How do you get a balance between doing the right thing for your staff and running a business?
It's hard: we need to help our customers by making it robust from a safety point of view as well as encouraging them to get people back in the office.
For my first time back in the office, I was taken aback at what a fantastic job we'd done, cleaning it and getting it ready. We've really gone to town on sites where there's food on offer – on the environment, the decision- making, and making it a safe haven restaurant. We want to get people to visit the restaurants more than they did before.
I like to eat outside, but I may as well eat in the restaurant at the moment, because I know more about it. We must really capitalise on this.
Do you expect to see consumers favouring office restaurants over the high street from a safety perspective?
Our responsibility, wherever we're operating, is to make it as safe and appealing as we can. People are tense; they're worried about coming to work, leaving their families and being out. If we can make the office a home from home, with somewhere nice to eat, it helps them in getting back to work.
The high street has done a fantastic job. I've been impressed by how seriously everyone is taking what we have to do in providing a safe place to eat.
How do you ensure that people will still enjoy the hospitality experience?
It's dependent on the site, as every one is a different shape and size and the rules are very general. The signage has got to be good, but not overwhelming – you're not in the dentist. We're use technology so customers don't have to use communal touchscreens and staff wear PPE, obviously.
We've done a lot of training on how to deal with the customer. We've shifted from ‘eyes and smiles' to covering up faces and pre-ordering. We're still trying to make it a really enjoyable experience rather than a ‘needs must'.
Take Starbucks, for example. It's not the same place. You can only stand in the doorway. I don't mind Perspex screens, but there's not the buzzing atmosphere you expect.
It's going to be interesting to see how it pans out. For now, you just want to get your coffee and get out – you almost feel guilty about going in. But as we move on, people will want to meet someone there, take their coffee and sit outside. There will be competition between outlets to get to something that touches every Covid button, but still makes it really enjoyable.
We're looking at how to make grab-and-go more interesting than just a bag full of the usual. We've done a lot of work on menus and takeaway hot food.
There's also the green element as well, which is really close to our heart. Our trays are Vegware compostable packaging and we're using second- or third-generation plastic where we have to.
What are some of the biggest operational changes you've made to your business and the venues you run?
Before, we had a range of food laid out for people to choose from, but you can't have a buffet-style approach any more. We had to completely re-engineer menus and the way we deliver meals to individuals.
We've made huge strides in digital and the app is working very well. People are using their own mobile phones and we've got rid of cash. Digital is here to stay and cash won't come back.
Visible cleanliness is important, but Perspex shouldn't be something to hide behind – you can still show an interest in the customer.
We're looking at future technology as well, such as staff-less restaurants, and we're looking at how can we get back to fine dining or hospitality at our stadia businesses.
Have you looked to diversify the business to replace lost turnover?
Constantly. Innovation is top of the tree. In a crisis, you've got to look at where you can get business from. Not jumping sector, but getting more out of existing customers or offering something we've not done before, like delivering meals or upselling non-food services.
Innovation is top of the tree. In a crisis, you've got to look at where you can get business from
When people have come into the office, had their temperature checked and sat down at their desk, they won't want to go through that again. We're looking at how we get to them through digital means.
We're also thinking about how we can get food to kids who have been off school for so long through home deliveries, or delivering to the door in nursing homes. Never in my life have we thought about delivering to the front door. We've always made the food, but it's been delivered by someone else. Technology has so many opportunities. I've been a bit terrified of it in the past.
What do you expect the market to be like for new business?
It did slow down, but it is starting to pump up again. People delayed tenders, so there may be a glut coming through. Business will still exist.
B&I, concessions and stadia are all seeing contracts being tendered. We've got sales development and marketing teams that are raring to go.
Much of the industry is having to lay off staff in line with decreases in revenue. Is this a route you've had to go down yet?
Yes. Not scary numbers, but any number is upsetting. This was never going to be a three-month pause. There are lots of fixed overheads for a business that's not there. You can't have a training department or finance or marketing for a business that isn't as a big as it was. My job is to try and get back to how it was, by whatever means. You have to be realistic about the future. Margin is easily eroded.
How are you supporting those let go and will you be looking to re-employ them when turnover increases?
I'd like to. I've looked at so many scenarios for how quickly we can get people back. We're doing the usual things, like trying to support people through outplacement. It's been most unpleasant. Every time the chancellor makes an announcement, we spend days trying to interpret what it means for us.
Our aim is to get back stronger, with plenty of growth and opportunity. We had to really batten down the hatches to survive for the future. Once we've got a sure footing, we'll be able to consider other opportunities.
About Elior UK
Elior UK was founded in 1991. It operates in six countries, employs 110,000 people and feeds five million people a day from its 23,500 restaurants.
Elior UK offers catering services across a huge range of sectors, from business, industry and commercial clients to care and residential homes through its Caterplus arm, as well as the education sector, defence, stadia and the City, via Lexington Catering. It also provides a range of support services, such as reception and security, cleaning and housekeeping.
In 2019, Elior UK launched the Foodsmiths brand into the events, venues, attractions and stadia sectors. It operates a range of venues, including Murrayfield stadium in Edinburgh, Ibrox stadium in Glasgow, St Albans Cathedral, National Museum Cardiff and Osborne House on the Isle of Wight.
The coronavirus effect
In July, Elior UK reported a 19.3% like-for-like drop in revenues for the first nine months of 2019-2020, with global sales falling to €3.131b (£2.82b). The third quarter took the most significant hit, with sales down 46.4% year-on-year to €672m (£606m), with scaled-back Tesco contracts in the UK highlighted as an area of lost business.
However, excluding Covid, organic growth for the first nine months of the year was 1.6%, and 1.8% for the third quarter, with Tower Hamlets schools, Rapport Housing & Care, publisher HarperCollins and energy company Baker Hughes highlighted as new UK contracts.
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