Stricter return-to-office policies are boosting growth for caterers

WASHINGTON – Tighter in-office mandates and the high cost of eating out are driving more workers to corporate cafeterias, where upgraded amenities and better food are used to lure staff back.

That is boosting volumes and growth prospects for caterers, including Aramark, Compass Group and Sodexo. Higher traffic can lift organic growth by as much as 1 per cent in the next 12 months, Bloomberg Intelligence data show. 

“The return-to-office trend may still have room to run, potentially offering further volume upside for contract-catering providers,” said Bloomberg Intelligence senior analysts Stuart Gordon and Evgeniy Batchvarov.

Paired with new contracts and pricing gains, that momentum may prompt analysts to raise estimates.

In major hubs, including New York, London and Paris, fewer employees expect to work remotely in the next 12 to 24 months, the latest BI Real Estate survey showed.

In New York, where 15 per cent of workers had the option to work fully remotely over the past year, only 11 per cent did so. 

Enhanced benefits beyond salaries – from better food to networking opportunities and productivity gains – remain top reasons for workers to return.

“Employers are increasingly relying on such features to lure staff back to the workplace,” the analysts said.

Demand for catering services is also coming from the other side, with employers chasing better value when it comes to running staff canteens, nearly half of which are self-operated.

A good canteen – with employers often footing part of the bill to help keep meal prices in check – goes far in filling office floors.

Aramark is already seeing the benefits. The Philadelphia-based company’s business and industry unit – about 15 per cent of its US revenue – has been its fastest-growing segment for seven straight quarters.

With the cost of meals outside the office still “elevated”, more employees are opting for subsidised meals in corporate cafes, chief financial officer (CFO) Jim Tarangelo said on the company’s most recent earnings call. 

Rising costs for consumers, from higher National Insurance contributions in Britain to a rebound in food inflation in North America, make Compass’ offerings attractive cost-wise compared with high-street operators, chief executive Dominic Blakemore said during the company’s third-quarter trading update.

It is not just out-of-pocket costs for employees or perks to keep office attendance up that are proving tailwinds. In an industry where size matters, caterers’ scale offers them flexibility that most high-street competitors do not have.

“In a high-cost environment, they have a lot of ability to rotate their menus based on what is expensive or inexpensive,” said Mr Ben Slupecki, an analyst at Morningstar.

Europe lags

Europe, where hybrid work remains more entrenched and volume recovery is uneven, is seeing a more tempered boost from return-to-office trends.

French caterer Sodexo reported just 1 per cent organic growth in its European business and administration segment in the most recent quarter as “softer volumes” prevailed, CFO Sebastien de Tramasure said on the company’s earnings call. Momentum is set to pick up through 2026, consensus figures show.

That contrasts with sharper gains in North America, where business and administration unit organic growth rose 1.7 per cent, outpacing Europe for a fifth consecutive quarter.

In Germany and the Netherlands, legal and contractual protections have strengthened employees’ rights to remote and hybrid arrangements, limiting the ability to enforce full-time returns.

“I don’t think we’re ever going to get back to that 100 per cent level,” Mr Slupecki said. BLOOMBERG