Turning Signals

Job and budget cuts make customer satisfaction key to B&I success

By Margaret Sheridan, Senior Editor -- Restaurants & Institutions, 6/15/2003

Julie Gray, Aramark’s resident district manager at Sprint Corp. headquarters, is tackling a challenge familiar to all business-and-industry (B&I) foodservice operators: Increase business despite cuts in customer spending and labor. If it seemed like a stacked deck, Gray’s business instincts told her that the way to tip the odds in her favor was with strong customer focus.

The Overland Park, Kan.-based telecommunications firm recently has struggled with declining sales and substantial job cuts. In response to the downsizing, Gray over the past 18 months has trimmed staff by 30%, leaving the foodservice department with 11 managers and 130 full-time employees. “Everyone is doing more with less,’’ she says.

Sprint is not alone in finding ways to survive the current bumpy economic ride. Between October 2002 and April 2003, more than 500,000 jobs were shed nationally. Still, the B&I segment—both self-operated and contracted operations—is proving growth can be achieved despite the challenges.

In order to improve foodservice, Gray conducted five customer-focus groups at the 240-acre, 20-building Sprint headquarters complex, where she daily serves 12,000 employees at three cafes and several coffee shops. In exchange for free meals, employees voiced opinions about all facets of the operations. Suggestions and input were refined and some implemented. By modifying production, price points and menus, Philadelphia-based Aramark has begun to see positive results.

Sprint employees asked for smaller portions at reduced prices. Overall, lunch checks averaged $4.25, but at the 640-seat Euro Café, which menus grilled items, specialty sandwiches and salads, it was $6. Gray moved to lower it.

“Euro Café was regarded as the place you went once a week or for a special occasion,’’ she says. When prices were lowered, business increased. Combo meals (two items plus beverage) for $5 were introduced in May, and pizza for $2.75 a slice replaced flatbread pizza at $4.96.

Since 30% of business is takeout, she decided to make two entrée salads, signatures at one cafe, available to all three units. To reduce labor and speed to-go service, salads are tossed ahead, with some packed in ready-to-go containers. Responding to requests for more-nutritious choices, Gray introduced sandwiches with fewer than 10 grams of fat each.

To compensate for the elimination of 10 employees at one cafe, she reduced entrées at one station from eight to five. Other initiatives included running three specials throughout the week instead of a different special daily.

Looking to increase business in the morning, Gray is studying placing breakfast carts by the parking ramps. “Getting from the car to the office is a long walk. People don’t have time to stop at a cafe,’’ she says.

GLASS HALF FULL
To increase food sales at Corning Inc. headquarters while keeping expenses contained, Dining Services Supervisor Michael Sweet introduced more self-serve stations offering less labor-intensive items. Employees at the Corning, N.Y.-based manufacturer of fiber-optic cable now purchase Reuben wraps that are made ahead and held under heat lamps, for example, rather than traditional Reuben sandwiches.

“I control costs by responding faster to the pace of business,” Sweet says. “I add or reduce staff depending on sales.” Sweet uses slow times to improve customer relations. “I spend more time with customers, asking what they want.’’

Catering, which represents 30% of overall food and beverage sales, saw improved profit margins when Sweet introduced new menus and less-costly centerpieces and table treatments. “I anticipate changes before the company tells me to cut staff and lower costs,’’ Sweet adds.

PARTY FAVORS
Hallmark Cards’ self-operated foodservice department is a source of pride for the Kansas City, Mo., company. But that doesn’t mean Christine Rankin is sitting still. The corporate services manager of foodservice is always looking for ways to grow business.

Her goal to increase catering revenues by 10% was nearly realized last year after she held a catering fair. Rankin invited 400 executives to sample desserts, entrées, appetizers and even pizza. The event yielded a contract for a pizza party for 250 technology department staffers.

“The fair created an awareness of what we do beyond chicken strips and macaroni and cheese,’’ she says.

Working smarter is critical for Rankin, whose staff has shrunk to 55 from 85 through attrition, with more unfilled vacancies anticipated. “When the cleaning staff was cut in half, we changed the schedule, limiting cleaning to after lunch,” she explains.

ACTION FIGURES
The 15,000 employees at Prudential Insurance Company of America in Newark, N.J., like a little action with lunch. Food stations where chefs are carving, slicing, tossing or grilling snag business, according to Ronald Ehrhardt, director of food services. But job cuts, a decrease in catering business and more-cautious spending by customers influence menus at the company’s 20 dining units.

The account, managed by the Eurest Dining Services division of Raleigh, N.C.-based Compass Group North America, is intent on raising revenues at dining centers, coffee kiosks and retail outlets. Developing catering is a lost cause, says Ehrhardt, who reports that his catering business has declined by 83%.

In consolidating stations for salads and sandwiches, he limited choices, adding variety by increasing grab and go. The results: Check averages increased by 12% to $3.94.

Because carryout accounts for 40% of total sales, Ehrhardt invested in higher-quality, restaurant-style packaging and more upscale menu choices. When customers complained about long lines, he created more pre-tossed salads plated by chefs. “Though customers want convenience, they also like being catered to,’’ he says.