Sodexo had a strong quarter in North America, thanks to new business growth, volume growth and pricing. In addition, the continued return to the office and strong retail sales growth also contributed to the company’s success in the quarter.
The Paris-based foodservice provider reported 10% organic revenue growth in North America for the second fiscal quarter of 2024.
Business and Administration had a strong quarter with 13.2% revenue growth. This was driven by new business and strong growth in food from the continuing return to the office.
Sodexo Live!, the foodservice provider's events business, saw 23.3% organic revenue growth in the quarter, driven by spending in all venues, but especially sports stadiums. Airport lounges also benefited in the quarter, driven by increased passenger count, added scope on existing contracts and new business.
In the education sector, organic revenue growth was 7%, thanks to price and volume increases, Meal count, retail sales and catering events also contributed to this growth.
In Healthcare and Seniors, organic growth was 6.3% with strong performance from hospitals in particular. This was driven by price increases, volume and retail growth. The success in hospitals was offset, somewhat, by senior site closure at the end of the previous fiscal year.
Inflation continues to ease, said Marc Rolland, Sodexo’s chief financial officer in a conference call to investors on April 19.
“We are definitely in a more favorable operating environment from an inflationary point of view. Food inflation continues to average out at low to middle single digits with a continued downward trend in Europe,” he said. “Labor inflation remains stable at around 5%. Pricing was close to 4.5% for the first half. It is decreasing in line with the softening of food inflation.”
The foodservice provider also recently celebrated 1.2 million plant-based meals served at New York City Health + Hospitals. Sodexo has been working with that client for 15 years.
“In 2019, they started with Meatless Mondays. And then in 2022, plant-based dishes were provided as the primary and default dishes to all patients,” said Sophie Bellon, Sodexo’s CEO,” We have even published a recipe book to extend good practices outside the hospital. And with a 90% patient satisfaction for food service, a 90% patient acceptance and a 36% carbon reduction year-on-year, this contract has become a showcase for New York City and also for Sodexo.”