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Food & Beverage: The Aramark Era begins

Coaster said:
They don't seem like a good company.
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Although I would agree they don't seem like a good company, it is possible that Aramark UK/Europe is much better than their USA operations.
Of course some companies are just awful around the world.

But for example, McDonalds UK has significantly higher quality products and standards in the UK compared to the USA.
 
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They're a bottom feeder. You can expect they will scrape the very bottom of the barrel in terms of satisfying whatever quality requirements Merlin have put in place (which are likely to be mapped to their present offerings, which as we already know, are low), pay minimum wage and if their fee is in any way linked to the takings they will charge the maximum they are allowed to.

Best case is no change, or slight improvement if Merlin are specifying a higher level of quality than what they previously provisioned directly.

More likely - this is a move intended to relieve their HR operation of responsibility for manning catering, and in order to make sure those catering outlets are staffed there will probably be a higher reliance on agency staff. Hard to see that being a good thing.
 
Dave said:
In theory the benefit of outsourcing is:

1) You take less risk
2) The outsourcing company is able to get better deals from suppliers as they are buying more to cover all their contracts.

I suspect as well that a company like this will offer different packages with varying levels of quality. So you might not see a major change in food quality (may even improve), but I would imagine it will stay the same as Merlin already have a huge markup on food.
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Echoes my thoughts. It makes sense from a business point of view, though there is a reputational risk if Aramark are unable to deliver, or significantly reduce quality. There is only so long Merlin will be able to blame any service issues on their partners when Joe Public know no difference.

My concern is that we will see a significant but drawn out decline in quality. And let’s face it, it’s not a high starting point. I don’t know much about Aramark, but it doesn’t appear they have much experience in F&B for hospitality and leisure.

I also think this marks the beginning of the end of any annual pass discount on F&B. Again, this will be gradual. It’s easy for the discount to be absorbed into their costs when they directly receive the income from both passes and food sales. But when they don’t receive that income (offset by no longer paying for stock and labour) the rebates paid out to Aramark to cover the discount will stand out and eventually be cut.

My other concern is the lack of control that parks and resorts will now have over their F&B experiences. How much I put will they have over menus, branding, and overall guest experience at any F&B outlet?
 
EuroSatch said:
I also think this marks the beginning of the end of any annual pass discount on F&B. Again, this will be gradual. It’s easy for the discount to be absorbed into their costs when they directly receive the income from both passes and food sales. But when they don’t receive that income (offset by no longer paying for stock and labour) the rebates paid out to Aramark to cover the discount will stand out and eventually be cut.
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I think that cutting the AP discount would actually do more harm and cause a significant decline in sales as many PA holders won't pay the prices and I expect there will either be a cut in spending (getting Burger Kitchen instead of Woodcutters for example) or an increase in packed lunches.

Prices for many things are fairly reasonable with AP discount, but are expensive without it.

That being said, the Merlin passes are already changing discount, only gold and platinium give 20%, silver gives 10% and discovery has no discount.
 
We have no idea what, if any, profit agreement Merlin and Aramark have though. This is outsourcing, not franchising, so I expect Merlin will no longer be receiving any revenue from F&B sales, which means they have no care over whether sales drop.

The rebates they pay to Aramark to cover where AP discounts have been used for F&B purchases will stick out as a sore thumb, and will be the next thing to target down.

If Aramark see declining sales, then they will want to address it by reducing prices, or simply walking away whenever there is a break clause in the contract. Which will leave Merlin a bit stuffed. Have they thought that far ahead?
 
EuroSatch said:
We have no idea what, if any, profit agreement Merlin and Aramark have though. This is outsourcing, not franchising, so I expect Merlin will no longer be receiving any revenue from F&B sales, which means they have no care over whether sales drop.

The rebates they pay to Aramark to cover where AP discounts have been used for F&B purchases will stick out as a sore thumb, and will be the next thing to target down.

If Aramark see declining sales, then they will want to address it by reducing prices, or simply walking away whenever there is a break clause in the contract. Which will leave Merlin a bit stuffed. Have they thought that far ahead?
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Outsourcing doesn't mean that either partner neccessarily gets any of the takings. When council functions are outsourced to Capita, it's not done on the basis of Capita sharing in the revenue from council tax directly.

It's possible that the entirety of the takings at the till go to Merlin and they pay Aramark an agreed fixed price for every meal sold. In theory Merlin could even provide all the stock and it'd still be outsourcing.
 
WillPS said:
Outsourcing doesn't mean that either partner neccessarily gets any of the takings. When council functions are outsourced to Capita, it's not done on the basis of Capita sharing in the revenue from council tax directly.

It's possible that the entirety of the takings at the till go to Merlin and they pay Aramark an agreed fixed price for every meal sold. In theory Merlin could even provide all the stock and it'd still be outsourcing.
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There are differences here. Capita area a Services Provider specialist, and are not operating a specific income stream or profit function for the council, but providing their services. So the contract would be structured by receipt of a fixed management fee for the services they provide. Important also is councils are not run for profits, unlike Merlin attractions

Aramark however will not be providing their services, but are taking over the operations of the F&B so it is likely they will be taking ownership of the income etc as well. If their input is limited to providing staff, then it’s difficult to see what aspect of the arrangement is attractive or worthwhile to Aramark

Though as I say, we have. I knowledge of what the contract has actually agreed
 
Just wanting to share my own experience of working within a sub-contracted catering operation "back when I was a lass".

Once upon a time a young Sazzle had a part-time job to supplement her income during college and University. And what a job it was...

I worked in a Tesco cafe which was branded, unsurprisingly, as a Tesco cafe. However, I was contracted to and paid by a company called Avenance/Elior UK. The cafe was pre-existing and had recently been contracted to Avenance, with the Tesco employees formerly working there being reassigned to the deli counters within the store.

Joe Bloggs who came in for their 7 item breakfast and paid £1.99 had no idea, nor indeed any care, for who was buying the stock, operating the kitchen or staff canteen, or paying the staff. We were Tesco cafe, and we were branded as such - nothing customer facing gave any indication of a contracted operation.

Contracts for this kind of thing work on a risk/benefit balance. If the Tesco cafe team were short-staffed for whatever reason, that wasn't Tesco's problem. If the Tesco cafe missed a delivery for any reason or had a stock problem, that wasn't Tesco's problem. If the Tesco cafe broke all their plates and had to pay a large sum to order more, that wasn't Tesco's problem. Tesco gave their name to an operation that was neatly packaged up as someone else's contractual obligation to get right, for a fee that they felt was fair - catering isn't often a hugely profitable operation when you're looking at mass produced fast-food.

My concern here is thus. Merlin give their name and permission to an outsourced operation who take an already minimal quality operation, and try to make it even more profitable. Profit often comes with a sacrifice, and I feel that that may well be quality. The eye-watering prices for fast-food (and indeed the very few sit-down options) across the UK Merlin parks blows my mind when I know the cost price of the products they're serving. I imagine this is what was attractive for the outsourcing company, as they could potentially see a profit margin to be exploited further. 10p on every burger might not be noticed by a park guest, but multiply that by the amount of burgers sold every day at every outlet at every park...

I'm sure the company did their homework, but I really question whether they understand the huge challenge of recruitment to this sector at the moment. When F&B offerings are closed in the park, guests really feel it and so did Merlin. It's not their problem now. Consider: Merlin could even make it a KPI and write it into the contract that there must be X amount of outlets open per day "or else"...? Definitely one way of managing a contract.

Interestingly as a final point that "back in the day" at the cafe, as staff we did not benefit from any Tesco corporate benefits; no staff discount, no pension, no shares. Although our uniform was 'similar', it was not provided by Tesco and was... cheaper. I wonder if the F&B staff will attract any Merlin perks? If not, they may find recruitment even harder...

Merlin may of course provide the staff (we have absolutely no idea what contractual arrangements are in place) but I would doubt it. Staffing is one of the biggest challenges of any organisation and I imagine Merlin will be glad to hand that over!
 
Extreme cost cutting is always the way with outsourcing.
I imagine...like others in the sector, they will be bussing in staff from larger towns.
Stoke will probably be the main one.
I heard rumours last year of temp catering staff coming to the coast all the way from Manchester in overstuffed minibuses.
 
rob666 said:
Extreme cost cutting is always the way with outsourcing.
I imagine...like others in the sector, they will be bussing in staff from larger towns.
Stoke will probably be the main one.
I heard rumours last year of temp catering staff coming to the coast all the way from Manchester in overstuffed minibuses.
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Depending on the contract clauses, there may well be nothing to stop the new catering outfit bringing in agency staff...

Agency staffing is always a higher risk to quality; why care about a place or product you have no affinity to and will likely never see again?
 
Sazzle said:
Merlin may of course provide the staff (we have absolutely no idea what contractual arrangements are in place) but I would doubt it. Staffing is one of the biggest challenges of any organisation and I imagine Merlin will be glad to hand that over!
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It seems that for this season at least Merlin are recruiting F&B staff, as they have been advertising as such on their website and recruitment days, with the usual perks of free tickets etc included in the job descriptions.

https://merlin.csod.com/ux/ats/careersite/4/home/requisition/11110?c=merlin

The press release on this deal did say the staff would be transitioned to Aramark from March 2022. Perhaps this deal was finalised too late for Aramark to get recruitment infrastructure in place for this season so Merlin are doing it this time round.

You would hope that the perks such as free park tickets would remain since it would be very sly to recruit people in Feb and offer them free tickets, to then push them off to another company in March and take them away before the attractions were even open. But I’m sure they have done worse.
 
AT86 said:
It seems that for this season at least Merlin are recruiting F&B staff, as they have been advertising as such on their website and recruitment days, with the usual perks of free tickets etc included in the job descriptions.

https://merlin.csod.com/ux/ats/careersite/4/home/requisition/11110?c=merlin

The press release on this deal did say the staff would be transitioned to Aramark from March 2022. Perhaps this deal was finalised too late for Aramark to get recruitment infrastructure in place for this season so Merlin are doing it this time round.

You would hope that the perks such as free park tickets would remain since it would be very sly to recruit people in Feb and offer them free tickets, to then push them off to another company in March and take them away before the attractions were even open. But I’m sure they have done worse.
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If they recruit on fixed-term contracts for this season it would be possible for the standard benefits to transfer over so staff get Magic Passes for 2022 but then new staff for 2023 won't get any additional benefits.

Do H&B leisure give their staff Magic Passes?
 
Back in the days of the "brand partner" catering outlets (so McD's, KFC & Pizza Hut) the staff working in these units got Dream Tickets (the free admission tickets, as they were known then). Tussauds as it was just sold the passes onto the unit operators at what they deemed cost price to be so they could be used as an employee enticement / benefit.
 
AT86 said:
The press release on this deal did say the staff would be transitioned to Aramark from March 2022. Perhaps this deal was finalised too late for Aramark to get recruitment infrastructure in place for this season so Merlin are doing it this time round.
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That seems quite likely. It is rather unusual for one company to recruit staff they know will transfer to a different company less than a month later.

It does also suggest that this is a rather last minute and, dare I say, rushed decision.
 
Does the Aramark deal include the kiosks which just sell packaged ice cream, sweets and drinks? Would that be staffed by someone from F&B or retail historically?
 
The usual set up was that kiosks selling drinks and snacks were run by retail not F&B (such as the stalls outside of X-Sector and near the Towers archway).

Therefore if things remain the same then these would still be run by Merlin.
 
Did someone say breakfast baps on Towers Street?

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Virtually double the price of a McMuffin (exc pass discount), but beggars can't be choosers.

Also a shame to see tables being comped left right and centre in SGR on Saturday. Servers were more than pleasant and apologetic about it, and no request for comping was needed. Not entirely sure what the issue was given there appeared to be enough servers, but at one point a chef had to serve a table himself who didn't appear to be kicking up a fuss.
 
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