Corporate Food Service Operators Have to Adapt to the New Reality of Serving Fewer Customers at Their On-Site Cafes
Kingston, NH, January 21, 2011 --(PR.com)-- “Corporate food service operators have to adapt to the new reality of serving fewer customers at their on-site cafes,” says Tom Mac Dermott, president of the dining and hospitality services consulting firm, Clarion Group, headquartered in Kingston, NH.
“It means more than just doing more with less,” he says. “It means rethinking the way employee dining service is operated.”
While many companies that have reduced head counts during the recession may be rehiring, he noted, that does not mean they will be returning to the empty desks in the office. More and more, companies are finding ways to have employees work remotely – at home or elsewhere, including other countries.
“Major law and accounting firms, for example, which formerly had large staffs of paralegals and other support personnel are now outsourcing routine research and paperwork overseas or to free-lancers and bring in professional temps for a few days or weeks at a time to work on a big project. That’s the new reality.”
Other companies are utilizing temporary or contract workers in the office and production plant at lower wages and with few or no benefits, he adds. These folks are not significant users of the company café. Operators also can’t rely on profitable catering business, especially large meetings or conferences. Many of these are now, and will be increasingly, “virtual” – via remote internet hookups.
The 2010 benchmarking survey by the Society for Foodservice Management, reporting operating results for 2009, offers some clues as to where corporate food services are heading.
· Seventy percent of companies participating in the semi-annual study reported their employee food services were unprofitable in 2009, compared to 66% in the 2007 survey and 61% in 2005. That number included operations that were intended to be profitable as well as subsidized services.
· The number of employees using the company dining center for lunch declined to 36% of the available population at profitable operations and 38.6% at the unprofitable/subsidized sites (where prices typically are held artificially low), compared to 40% or better in the 2008 survey and 50% or more a decade ago. Breakfast patronage declined to a little over 22%, vs. better than 24% in 2008.
· Food services that showed a profit reported their return averaged $600 a day, less than half of the profit reported two years earlier. Operating losses at unprofitable food services were $1,359 a day, a third higher than were reported for 2007.
“However, on the sunny side,” Mac Dermott said, “the average spending per customer increased by 10%.” He attributed the increase to two factors: “Operators have increased prices to offset rising food costs and, at many companies, the workforce reductions apparently were deeper in the ranks of lower-paid employees. Those remaining may be comparatively more affluent and spend a little more, bringing the averages up.”
How can operators adapt to these changes in their market that are beyond their control? Mac Dermott offers these suggestions.
· Recognize that many of your customers are time-pressed and often eat at their desk or work site. More attractive, varied and better-packaged grab-and-go foods, located conveniently are part of the answer.
· A kiosk, featuring fresh coffee, fresh fruit and breakfast pastries, located near an entrance used by most employees may prove more convenient than stopping at the convenience store on the way to work.
· The green revolution is here. Many employees, especially women, bring their “healthier” meals from home. The operator has to offer more fresh meals, made at the counter from local and, as practical, organic ingredients to entice these customers back.
· Where there is a significant foreign-born population, it will be worthwhile to employ a chef from their home country or region to prepare familiar foods.
· If the employee population is likely to remain lower than a few years ago, it will pay to renovate or refurbish the cafe in a smaller footprint, utilizing the new, more efficient, less energy-intensive equipment now on the market. This will reduce labor costs as well as energy and overhead costs and maybe free up valuable space for other purposes.
###
About Clarion Group: Since 1995, Clarion Group has helped companies, colleges, schools and institutions to improve the value and reduce the cost of their in-house employee or student dining services, conference and catering services and facilities support services, such as conference and event management, audio/visual services and lodging.
For information, contact:
Tom Mac Dermott, FCSI, President
Clarion Group
PO Box 158, Kingston, NH 03848-0158
603/642-8011 TWM@clariongp.com
www.clariongp.com
“It means more than just doing more with less,” he says. “It means rethinking the way employee dining service is operated.”
While many companies that have reduced head counts during the recession may be rehiring, he noted, that does not mean they will be returning to the empty desks in the office. More and more, companies are finding ways to have employees work remotely – at home or elsewhere, including other countries.
“Major law and accounting firms, for example, which formerly had large staffs of paralegals and other support personnel are now outsourcing routine research and paperwork overseas or to free-lancers and bring in professional temps for a few days or weeks at a time to work on a big project. That’s the new reality.”
Other companies are utilizing temporary or contract workers in the office and production plant at lower wages and with few or no benefits, he adds. These folks are not significant users of the company café. Operators also can’t rely on profitable catering business, especially large meetings or conferences. Many of these are now, and will be increasingly, “virtual” – via remote internet hookups.
The 2010 benchmarking survey by the Society for Foodservice Management, reporting operating results for 2009, offers some clues as to where corporate food services are heading.
· Seventy percent of companies participating in the semi-annual study reported their employee food services were unprofitable in 2009, compared to 66% in the 2007 survey and 61% in 2005. That number included operations that were intended to be profitable as well as subsidized services.
· The number of employees using the company dining center for lunch declined to 36% of the available population at profitable operations and 38.6% at the unprofitable/subsidized sites (where prices typically are held artificially low), compared to 40% or better in the 2008 survey and 50% or more a decade ago. Breakfast patronage declined to a little over 22%, vs. better than 24% in 2008.
· Food services that showed a profit reported their return averaged $600 a day, less than half of the profit reported two years earlier. Operating losses at unprofitable food services were $1,359 a day, a third higher than were reported for 2007.
“However, on the sunny side,” Mac Dermott said, “the average spending per customer increased by 10%.” He attributed the increase to two factors: “Operators have increased prices to offset rising food costs and, at many companies, the workforce reductions apparently were deeper in the ranks of lower-paid employees. Those remaining may be comparatively more affluent and spend a little more, bringing the averages up.”
How can operators adapt to these changes in their market that are beyond their control? Mac Dermott offers these suggestions.
· Recognize that many of your customers are time-pressed and often eat at their desk or work site. More attractive, varied and better-packaged grab-and-go foods, located conveniently are part of the answer.
· A kiosk, featuring fresh coffee, fresh fruit and breakfast pastries, located near an entrance used by most employees may prove more convenient than stopping at the convenience store on the way to work.
· The green revolution is here. Many employees, especially women, bring their “healthier” meals from home. The operator has to offer more fresh meals, made at the counter from local and, as practical, organic ingredients to entice these customers back.
· Where there is a significant foreign-born population, it will be worthwhile to employ a chef from their home country or region to prepare familiar foods.
· If the employee population is likely to remain lower than a few years ago, it will pay to renovate or refurbish the cafe in a smaller footprint, utilizing the new, more efficient, less energy-intensive equipment now on the market. This will reduce labor costs as well as energy and overhead costs and maybe free up valuable space for other purposes.
###
About Clarion Group: Since 1995, Clarion Group has helped companies, colleges, schools and institutions to improve the value and reduce the cost of their in-house employee or student dining services, conference and catering services and facilities support services, such as conference and event management, audio/visual services and lodging.
For information, contact:
Tom Mac Dermott, FCSI, President
Clarion Group
PO Box 158, Kingston, NH 03848-0158
603/642-8011 TWM@clariongp.com
www.clariongp.com
Contact
Clarion Group
Tom Mac Dermott
603-642-8011
www.ClarionGP.com
TWM@clariongp.com
Tom Mac Dermott
603-642-8011
www.ClarionGP.com
TWM@clariongp.com
Contact
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