I am responding to Pat Kabat’s article in the October 21, 2005 issue of the Maroon-News titled “Coop Robs Students.” He asks, “Who holds Sodexho accountable? Who is it in the University administration that can deliver an ultimatum: ‘shape up or ship out’?”
Well, Pat, that would be me. I am responsible for ensuring that our students pay a fair price for their food and receive good, nutritious meals. Colgate accomplishes these objectives by outsourcing dining services to Sodexho, under the leadership of Director of Dining George Murray. Typically, George works directly with an SGA committee to review food quality and prices and to act when a problem surfaces. Associate Dean for Student Affairs Sue Smith and I also work directly with the SGA to help resolve problems and implement new ideas. These activities often result in modifications to meal plans, food items, and prices.
As we and our student focus groups were helping to design the Coop renovation a few years ago, the SGA asked us to replace fried food with salads and fresh fruits and vegetables, and we did just that. A year after the renovated Coop opened, students asked us to reintroduce popcorn chicken, burgers, and breakfast sandwiches. We responded accordingly. At the same time, students asked for meal plans with more options and greater access to Frank, and we provided both. We respond to student concerns and preferences, even as those preferences change from year to year.
With respect to prices, Sodexho annually provides Colgate with competitive pricing data based on a market basket of food items from local and regional restaurants. This review helps Colgate and Sodexho ensure that students are getting reasonable value for their food dollar. If Sodexho’s prices were not competitive, students would increasingly purchase meals and food items off campus. The data doesn’t support that.
In fact, Sodexho’s annual price increases are typically below the consumer price index. At the same time, if Sodexho were to undercut local prices and students did not support off-campus dining, local restaurants would not survive and culinary diversity would decline. No one wants that.
We collectively benefit when Sodexho’s pricing structure remains competitive but not exploitive. In any case, within the next few weeks we’ll check on local restaurant prices for a variety of food items and report back in the Maroon-News. Students will participate in this initiative.
In his editorial, Pat colorfully raises the issue of excessive Sodexho profits. He says, “It is only with the self-assured, placid and smug security of an up-the-hill monopoly that Sodexho executives can excavate our wallets.” The facts don’t support excavation or even exploratory digging. The profit margin in the food service industry is miniscule, on the order of two percent. That is why so few providers remain in the business, namely Sodexho, Aramark, Chartwell, and Bon Apetit.
If Sodexho were to earn less, its European parent company would surely convert its food service division to other, more profitable lines of business. That would mean fewer food service providers from which Colgate could choose and, ultimately, higher prices for students.
On the other hand, if Sodexho were to increase its profit, the Colgate market would appear more attractive to competitive providers – a condition Sodexho would like to avoid. Moreover, greater profits would require higher prices or lower quality, both of which are unacceptable to all of us.
Where does that leave us? The fact is that Sodexho and other large food service providers are locked into a very narrow profit structure, and the values within that range simply don’t reflect the exploitation implied in Pat’s earthy metaphor.