The client of this site had used the services of one of the big four contract catering companies since opening the staff catering facilities four years before. Over time he had become less happy with the cost of the operation which had seen an increase from £22,600 per annum to an annual subsidy of £28,900.
We were asked to tender this and a second catering operation on a fixed cost basis, with the ceiling being capped at 50% of the current subsidy. Though initially we were concerned that this may compromise the offer and quality of service we proceeded to analyse the existing operations. During our investigations it became evident that the incumbent caterer was making additional profit through purchases and free issues that were being charged back to the client.
We drew up a tender document outlining the style of service required and providing outline data for competitors to tender against. The subsequent tender responses proved extremely innovative and the client engaged one of the “new boys” to run his catering. The subsidy was reduced by 35%, slightly less than the target 50%. However since gaining the contract the caterer been given permission to open up the facilities to use by nearby businesses helping to reduce the subsidy further.
We had provided stocktaking services to this client for four years when they asked for our advise on developing the commercial catering opportunities for the catering and bar service within the councils premises.
Our adviser reviewed the performance of the business and prepared a report for the Finance and Economic Development Board. The Board were impressed with our suggestions and engaged us to improve the catering provided in the Council Offices and to re-launch the commercial catering in the other civic buildings.
The catering offer in the Council Offices was brought up to date with the opening of a deli/cafe bar. The emphasis of the offer was fresh locally sourced healthy food, without the preaching. Though at first there was resistance from the traditional customers within three weeks it was noted that there had been a change in the customer base. Sales volumes had increased with a higher percentage of office based staff using the facility. The turnover had increased from £3,000 per week to £4,965 by the end of the second month with customer numbers going from just below 200 to an average of 310 per day and the average spend increasing by 15p per transaction.