Compass rides out food inflation worries
Compass Group has announced strong financial results for the six months ending 31st March 2008, which shows that concerns about food inflation prices are not having a damaging effect on the business.
The group saw profits jump to 5.7%, compared with 5.1% in March last year.
Total profit hit £5.6bn as strong relationships continue with clients such as the Bank of England, Wimbledon, and football clubs Chelsea and Manchester United.
Speaking about the results, CEO Richard Cousins said: "The Group has delivered a strong set of results as we continue to benefit from the implementation of the MAP (Management and Performance) framework and the tight operational focus it has instilled across the organisation. The Group has also strengthened its contract mix by continuing to win high quality new business in key markets."
The company also said in a statement that it's commitment to culinary talent has contributed greatly to these latest results: "Within the business we continue to focus on all aspects of the culinary experience. In 2007 we appointed a UK Executive Chef and senior executive chefs for our major sectors, who are also part of our senior leadership team. This is an initiative adapted from our US business, and encourages the development of the culinary side of the business through working with our chefs, suppliers and clients."
Compass added: "This is working well and as an example we have been able to build on the progress already made within our schools business, with both our Executive Chef and fully qualified educational nutritionist developing healthier menus. We also continue to build on culinary heritage that exists within the business and were pleased to announce last week that we are to strengthen our fine dining offer with Gordon Ramsay at Restaurant Associates. This builds on the existing relationships with Albert & Michel Roux and Gary Rhodes."
Going forward the business will off-set costs from higher food prices by using fewer suppliers, re-writing menus and passing on increased costs to customers: "We continue to see market inflation for our basket of goods of 4-5% (last reported in November). Although the increases occurring in dairy, rice and pasta prices have been at significantly higher rates, these account for only about 10% of the Group's spend on food. We are able to mitigate around one percentage point through leveraging our purchasing scale, as well as benefiting from menu planning, a focus on reducing waste, product and supplier rationalisation and client and consumer price increases."
Words: Clare Riley
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