Price points are in effect
Sodexo compares prices at stores around the city to keep their prices fair
Published: Thursday, October 4, 2012
Updated: Thursday, October 4, 2012 14:10
One place you may not expect to see Renee Burgess, retail director of Loyola Dining Services, is roaming the aisles of local grocery and convenience stores.
Sans basket or cart, Burgess studies price points at local food retailers to compare and adjust Sodexo food prices accordingly.
“I’ve gone to Rite Aid, Rouses on Tchoupitoulas and Robérts,” said Burgess.
Burgess, new to Loyola Dining Services management, has taken further steps in bringing the Loyola community comparable price points – especially at The Market, otherwise known as the C-Store.
This may be news to students, who are familiar with some of The Market’s high prices in comparison to larger grocery stores such as Rouses and Walmart.
“I bought a Lunchable and mango juice – a snack, not a meal – and it was $7,” said Lauren Phelps, undecided freshman, “For a snack, that’s a lot. That’s offensive.”
“I like the convenience of the C-Store – it’s right there,” Lauren Patton, theatre and communications junior. “The expense just makes me hesitant to go there.”
“The Market prices are hard to compare to grocery stores,” Heather Bacque, general manager of Loyola Dining Services, said.
Chain stores receive a large volume discount because of the amount of stock they purchase, giving them greater buying power than low-volume stores such as the C-Store.
“When you are a small store, you’re buying by the case, not by the truck,” Jeff Lenard, vice president of industry advocacy for the National Association of Convenience Stores. One challenge convenience stores face is “competing against big box stores, yet having higher cost of goods.”
“Unfortunately, we don’t do enough volume in grocery items to receive the buying power and benefits of, say, Rouses,” Bacque said.
Burgess takes note of grocery store prices but mostly goes to low-volume convenience stores and small grocery stores, like Rite Aid or Langenstein’s, to compare prices.
“We calculate pricing based on the price we pay for the products we sell in the store. Since we don’t receive the volume discounts like grocery stores do, some of our prices may be higher. Although we try to keep our prices as in line with convenience stores in the area,” Bacque said.
In reality, Sodexo really isn’t making that much money off of the items they sell.
“There are some items that we take a loss on or break even on because we know it’s popular (ex: Arizona Iced Tea) and others where we only gain a couple of cents in profit,” Bacque said.
In addition to Burgess’s shopping trips, every summer Loyola Dining Services participates in Sodexo’s Right Pricing Model to keep pricing accurate.
“The model asks you for your current selling point and it compares it to the current market price,” Bacque said. From these methods, “Some prices increased and others decreased across the board.”
What Sodexo does save on is raw food costs. Low costs on food prepared by Sodexo workers give the dining provider the ability to price an average all-you-can-eat Orleans Room meal at $8.50.
“People are price sensitive,” Lenard said. Low-volume stores “must be in line with what people are willing to pay.”
Lauren Irwin can be reached at email@example.com