Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

Vision gets a little blurred in the delivery

03 February 2006
Vision gets a little blurred in the delivery

It doesn't seem long ago that everyone was wringing their hands about the difficulties Sodexho was having in the UK. More recently, we all watched Bill Toner try to power Aramark forward, leaving it with more turnover but maybe not quite the increase in profits it would like. Now we are watching Compass being forced to reinvent itself.

At the same time, we see smaller players, such as BaxterStorey, Charlton House and Wilson Vale, growing healthily.

There's fantastic vision at the centre of most of the larger caterers' organisations. The trouble is, the area manager trying to run 30 contracts doesn't always have time to translate that vision into reality.

To make matters worse, the spectre of supplier deals is often lurking in the wings, usually involving centrally procured products that generate a healthy financial kickback to the caterer. This almost inevitably means using some sort of convenience foods which, in turn, dilutes the authenticity of some of the ideas.

Luckily, there are enough really good site managers out there to make sure the vision isn't always messed up. This, together with what isn't always the most discerning customer base, means the system generally works.

But the dominance of the big boys is being nibbled away by smaller caterers whose key people can be close to their business and who don't need to make as much profit because they don't have shareholders to keep happy. This means they are less driven by supplier deals.

To make things even tougher, the people buying catering services have smartened up, so there is less opportunity for caterers to make money through the back door via discounts and hidden surcharges.

Of course, some caterers are fighting back - just look at how Compass's Restaurant Associates division is running so many juicy contracts in the City. Sodexho has also smartened up its Directors Table division.

But this is only scratching the surface of the problem, and it will take more fundamental shifts, and possibly a
re-education of shareholders to lower their profit expectations, before the big contract caterers can deliver their vision.

Chris Stern is managing director of Stern Consultancy

Is the high street killing the staff canteen?

Jonathan Doughty, group managing director, Coverpoint

"No. I think the high street is teaching contract caterers, if anything. Contract caterers have a price advantage because they don't have the same overheads as a high-street outlet. If you adopt a more retail-based approach and mimic the high street, you can deliver catering at the same level at a lower cost to the consumer."

Robyn Jones, chief executive, Charlton House

"No, but it certainly challenges us. The high street has made us all pull up our aspirations and ideas to make sure we beat it. We have advantages in being able to offer competitive pricing, such as through subsidising. The standard of food in canteens is certainly as good, if not better, than what's on offer on the high street."

Phil Hooper, corporate affairs director, Sodexho

"Absolutely not. Quite the reverse. It is of course a serious competitor, but it forces us to innovate, which can only be a good thing. Naturally our customers are influenced by the high street and, in turn, we are influenced by our customers. We have to be conscious of customers' ever-changing needs, and make sure we offer them what they want."

Geoffrey Harrison, MD, Harrison Catering Services

"Industry luminaries keep telling us how lunch hours are getting shorter and people just want sandwiches, but in our experience this is not the case. If you can harness the flexibility of on-site catering, the results can be far better than just following the high street. People want proper food, not a replica of what's on the high street."

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Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.

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