Faced with teleworking, can Sodexo find the recipe for success?

This article is from Capital magazine

Roots, the new company restaurant of the Havas communications group, in Puteaux (92) is crowded at midday in November. Sogeres, a subsidiary of the collective catering giant Sodexo, installed his cohorts of cooks here two months earlier in an environment designed by the design and architecture agency W. The products are fresh, the dishes prepared in advance, the desserts made in loco. A Starbucks-style coffee shop serves non-stop snacks.

As for the decor, it looks like a trendy restaurant: designer wooden tables equipped with sockets for smartphones and computers, comfortable booths to isolate yourself or work, elegant lighting. The acoustics and lights (LED) have also been worked on to make the space welcoming. “We used to go down to the cafeteria dragging our feet, it wasn’t going very well, everyone complained. Today, despite working from home, there are more visitors and fewer customers in the restaurants in the area! ”Jokes an employee, grabbing his tray.

Ah, if all the canteens managed by the Sodexo group have benefited from so much enthusiasm… Unfortunately this is not the case. “Our restaurant business has only recovered 73% of its pre-Covid turnover,” breathes Marc Rolland, the group’s chief financial officer, world number 2 in collective catering behind British Compass. For Sodexo, which serves meals in companies but also in administrations, schools, universities and health facilities, this is a real concern. Catering represents 60% of its revenues, the rest comes from “benefit and reward” activities (restaurant tickets, gift vouchers, etc.) and “Facility Management”.

Last year, due to the pandemic, the group’s turnover fell by 12% to 19.3 billion euros. Profit fell from € 665 million to a loss of € 315 million. Of course, Elior, the other French player in collective catering, has seen worse (loss of 483 million euros). But for Sodexo the dish was very bitter: never, since its foundation by Pierre Bellon in 1966, had the company been in the red.

Not knowing the social plans, he had to decide to cut 2,000 jobs in collective catering in France (the group has 412,000 employees in 64 countries). Since then there has been an improvement with a profit of 139 million euros in 2021 (the financial year ends in August). But not everything is settled because, after Covid, we have to manage its consequences.

First problem? The sustainability of teleworking. “It has become a structural fact. From a social, environmental point of view or to save square meters, everyone finds their account ”, comments François Blouin, president of Food Service Vision, a strategic consulting company specializing in catering. For Sodexo and others, however, it is a big stumbling block in the lentil dish. “When employees are granted two days of teleworking per week, as is the most frequent case, catering in the heart of the company mechanically decreases by two fifths, or 40% compared to the pre-Covid context”, summarizes Olivier Schram, director associate of PH Partners, another expert company in the sector. The president of the group, Sophie Bellon, estimates the deficit linked to teleworking at 500 million euros.

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But new employee work habits, particularly in the service sector, aren’t the only cause. “Four years ago, strategic reviews already showed an erosion of corporate restaurant attendance with the rise of vegetarianism, veganism, local taste and home cooking,” continues François Blouin. To the point that the professionals of the sector have started to lose their Latin. “In terms of consumer expectations, we are seeing a blurring of the boundaries between commercial and collective catering,” acknowledges Wendy Wierzchowski, general manager of Exalt, the premium subsidiary of the Compass group.

Telework, more disaffection for “cantoche”… The cocktail challenges the traditional model of the profession: narrow margins offset by large billing volumes. Under these conditions, how to deal with? “We have to reinvent the business, for example by making offers for employees who work from home, or by installing mini-supermarkets within the company to allow meals to be taken away,” suggests Bruno de La Rochebrochard. , analyst at Bryan, Garnier & Co. “The obstacle is the size of these boxes. Moving 400,000 people is far from simple.

Sodexo’s CEO, Denis Machuel, when asked to urgently define a rebound plan, was deemed too consensual in the eyes of the group’s directors: at the end of September he was suddenly fired after three years at the helm and replaced by Sophie Bellon, acting in the meantime waiting to find a CEO.

The new boss’s creed? To transform Sodexo into a “technology services company” and, to go faster, buy foodtech start-ups, a niche that attracts a crowd of young entrepreneurs. “The idea is to acquire more customers through a 360-degree approach”, explains Marc Rolland, CFO. Example in France: FoodChéri, part of the Sodexo group since 2018, offers to deliver meals ordered on smartphones via its application or that of its parent company, SoHappy. Accessible in Paris, Lyon, Bordeaux, the service made it possible to reach SMEs. “The dishes are prepared in our kitchens with guaranteed freshness, lots of organic products and a minimum of additives,” says Jérôme Lemouchoux, CEO of FoodChéri.

In the larger boxes, the company also offers the installation of equipped spaces – such as the Cojean self-service – option chosen by Doctolib or Showroomprive.com. Or, to implement “connected refrigerators”, which allow employees to help each other around the clock and pay using their badges. Another formula, Seazon, provides for home delivery of boxes containing up to 14 dishes to be kept in the refrigerator for the week. Finally, at the same time, Sodexo has entered into agreements with Uber Eats and Deliveroo for the delivery of meals purchased in listed places through its Pass Restaurant card, the digital version of the restaurant ticket. While competition is fierce in this area as well with new nuggets like Swile, the group is hoping that the appetite will come with eating.

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Elvira Parkinson

"Alcohol scholar. Hardcore tv junkie. Wannabe bacon enthusiast. Twitter fanatic. Subtly charming travel guru. Pop culture specialist."

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