Keeping a Corporate Food Service Profitable

Situation

When a company began a reorganization, it reduced the population served by its employee café, operated by a food service contractor without a subsidy.

Problem

Over six months, staff café sales slid by 14% and catering sales dropped by 44%.  The contractor said it was losing money and asked for a subsidy to cover the losses.

Solution

We found internal weaknesses in the contractor’s operation including weak cash control, poor kitchen management and waste.  We worked with our client and the contractor to improve controls and services and reorganize staffing to reduce one position.  We recommended and implemented the opening of a new service point for employees not served by the main café, generating new revenue to offset the reduced main café sales.

Benefits

The revitalized food service revenue grew to $2 million retail and catering sales, plus $200,000 in vending sales.  The operation became and remained profitable.  The company enjoyed improved services without having to pay a subsidy.  The contractor was able to earn a fair profit because of the new opportunities and internal efficiencies we identified and helped implement.

For additional information, contact Tom Mac Dermott, FCSI, Clarion Group, 603/642-8011, TWM@clariongp.com.