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08 Compass Group PLC Annual Report 2007Chief Executive’s statementcontinuedIn response to our clients’needs we have developed astrong capability in a selectedrange of support servicesthat complement our corefoodservice offer.International clients managementThrough our international clients programme weare developing closer relationships with multinationalorganisations. They recognise that we have thegeographical coverage and capability to deliveroutsourced food and support services to the sameworld-class standards, globally and enable them toachieve their own global objectives.Steamplicity – market-leading innovationMarket-leading innovations like ‘Steamplicity’ arehelping us to open up new segments of our coremarket sectors. Already being enjoyed by consumersin the UK and Europe, ‘Steamplicity’, uses patentedvalve technology to healthily steam-cook meals withinminutes, retaining nutritional content and promotingwellness and vitality. Ideal for providing hot meals‘cooked to order’ for hospital patients, schoolsand environments where traditional kitchen spaceis often restricted.MAP 1 – Client sales and marketingMAP 1 focuses on deliveringprofitable growth from existingand new clients and developingour penetration in our chosenmarkets.Growing our marketsWe continue to see growth in our corecontract foodservice market. We see excitinggrowth in every sector, especially Healthcareand Education, driven by innovations suchas ‘Steamplicity’, and in a growing Sports& Leisure market where we have hadgreat success in winning contracts forprestigious events and major venues, suchas The O2 in London, the largest sports andentertainment complex in Europe, KrugerNational Park in South Africa and theAbu Dhabi National Exhibition Centre(ADNEC) in the United Arab Emirates.Our country MAP plans detail our approachto developing each market. Our globalsector forums, supported by our new marketdevelopment function, provide the meansto identify and respond to emerging markettrends, facilitate the rapid transfer ofbest practices from one part of the Groupto another and drive innovation in ourclient offer.Last year we identified the support servicesmarket as an attractive opportunity for anumber of reasons:We have an existing capability to buildon, with some industry leading expertisein certain services and sectors;It enables us to respond to an increasingnumber of clients who are looking tobundle services, including foodservice; andIt complements the service and healthand safety ethos that has gained usour reputation for excellence in thefoodservice market.Our strategy is to develop the support servicesmarket in a disciplined way by focusing onselected services, sectors and countries.To give us real competitive advantage in thismarket we have developed the CompassService Framework, using the very bestknowledge that we can find in the world toensure that we can deliver the world-class,consistent capability that clients demand.Driving like for like revenueThe size and depth of our client base and theloyalty of our clients reflect the quality andscope of the services we provide, and we areproud to count organisations that are leadersin their markets as our clients.The focus over the last 12 months and goingforward is to improve the discipline withwhich we manage our existing clientrelationships and improve the performanceof our contract base. To achieve this we havefocused on the following areas:Ensuring that we have the right contractterms in place that accurately reflect theservices we are being paid to provide andthat we have the appropriate reviewprocesses and controls in place to monitorservice levels, client satisfaction and priceindexation, the latter being vitallyimportant in managing throughinflationary cost increases;Extending the services we provide,for example, adding vending or cleaningto a foodservice-only site, or increasing thenumber of sites we support, and drivinglike for like volume and average spendincreases in our existing operations; andProactively reviewing contracts where thefinancial and operational performancedoes not meet expectations and taking theopportunity to renegotiate these to putthem on the right basis going forward.More disciplined new businessAs we develop our core markets it is vital thatwe maintain a healthy new business pipeline,supported by the necessary disciplines toensure that we take on the right businesson the right terms. We have been putting inplace across all our businesses clear guidelinesand training for our sales teams on our keycontract terms. This is supported by a robustapprovals process for new business bids at acountry level and, dependent on the scaleof the opportunity or the level of capitalinvestment required, review and approvalat a Group level.
09 Compass Group PLC Annual Report 2007Our consumer focusis driving continuedinnovation in our brandsand foodservice offers.Selling more beveragesIn the Czech Republic we have doubled like forlike beverage sales in our 350 Business & Industryunits. Through understanding consumer behaviourswe identified a significant opportunity to captureincremental beverage sales by focusing on ‘hydrating’people better in the workplace. Key initiatives werebased around expanding day-parts, increasing varietyand choice and educating the consumer on theimportance of hydration. Solutions were to increaserange and package types, introduce larger packsizes, install incremental equipment (coolers andracks), improve merchandising and place hydrationmessages at point of sale.Improved pricing through ‘Value Planning’2,000 of our operating units in the USA are usingthe ‘Value Plan’, a simple but highly effective pricemanagement and benchmarking tool whichprovides the framework for setting pricing strategies.Through the ‘Value Plan’ we compare unit pricinginformation against national and local ‘market basket’benchmarks and inflation forecasts, to set our targetprice points for each of our major categories. Thisprovides our Unit Managers with credible data todevelop their own unit pricing plan and set regularpricing reviews with our clients. Performance isnow being tracked through weekly ‘owners reports’from each unit, comparing the actual price achievedagainst our target price for the top selling categories.Recently developed supporting tools such as‘mapping the servery’ and ‘station profitability’enable managers to analyse the performance ofindividual areas of the restaurant. The impact of the‘Value Plan’ is evidenced in like for like sales growthof 5% and an increase of up to 10% in averagespend per transaction.MAP 2 – Consumer sales and marketingMAP 2 reflects the importance ofhaving the right offers and retailskills to drive growth in consumervolume and spending.Understanding consumer trendsto drive innovationWhilst we may be feeding people either intheir workplace, at college or in a hospitalrestaurant, their demand for quality, choiceand value are equally as discerning as youwould find on the high street. Our focus onunderstanding consumer needs and futuretrends is driving the development andinnovation in our food offers, brands andservices. In Healthcare, for example, we haveled the market with the introduction ofpersonalised patient meal ordering, such asour ‘Catering to You’ service, which providesgreater flexibility, choice and individualdietary control. Developed in the USA,‘Catering to You’ has already successfullytransferred to other countries.Health, wellbeing and sustainability areimportant topics that matter to ourconsumers in every sector. As a globalfoodservice company we fully understandthe responsibility we have in helpingconsumers make informed choices aboutdiet and nutrition. Our in-house dieticianswork with our culinary, product developmentand purchasing teams to create menuprogrammes that combine menu planning,labelling and promotion, and educationaltraining for our people to deliver food choicesthat are safe, nutritious and balanced, andsuit the lifestyle and tastes of our consumers.For example, in our US Education business,‘Eat, Learn, Live’ is a market leadingcommitment to the health and wellbeingof children and students from primaryschools to college. This holistic approachdrives innovations such as ‘Brake forBreakfast’ and ‘Morning Editions’ providinga healthier start to the day. In addition wehelp educate students to recognise andchoose healthier options, provide a nutritionand physical activity for the curriculum‘Healthsmart’ and support health relatedin-classroom and outreach programmes.Improved pricing managementIn an increasingly ‘retail’ market we aretaking a more thorough approach to pricingand are deploying pricing tools and processesto enable our managers to undertake‘local market basket’ benchmarking which,combined with national benchmarking,enables a regular, fact-based pricing reviewwith our clients. For example, in our UKbusiness our units receive a regular ‘PriceWatch’ update providing information, basedon ‘high-street’ benchmarking research.Driving volume and spendA greater understanding of our consumersenables us to more effectively target offersthat entice consumers into more repeat visitsand encourage them to spend more per visit.To achieve this we are developing a moreretail-focused approach to promotions, sellingskills and merchandising. In our Business &Industry sector this might mean extending theuse of the restaurant through different daypartoffers, for example, broadening out froma lunch time only service to include breakfast.In Germany, in response to consumerresearch we have developed a ‘Grab and Go’offer as an additional service which is nowgenerating a like for like volume increaseof 4%.Controlling the cashLearning from the retail sector, at the sametime as driving increased sales, we havefocused on ensuring that we are not losing thiscash to poor cash handling disciplines, stockshrinkage or even theft. The experience ofa considerable number of trial sites forour ‘Profit Protection’ programme in theUK has shown that a focus on this area(putting training and processes in place,supported by the right technology) canlead to sales increases of up to 7%, cashreconciliation improvements of up to 3%and a significant reduction in cash ‘loss’.
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