Risk of not keeping and renewing contracts with Sodexo’s existing clients.
Sodexo’s clients have been impacted to a greater or lesser extent in all segments by the Covid-19 pandemic in Fiscal 2020. Periods of lockdown, where large populations have been confined to their homes mean partial or full closure of client premises for weeks or even months. In the Education sector, for example, some countries did not open schools or universities for the rest of the academic year.
As clients re-open their premises, their needs have changed: offices and schools have to be re-configured to adhere to social distancing requirements, more intensive cleaning may be needed, and the food offer has to be more flexible, as employees continue to work partially from home. For example, the traditional workplace food offering – an on-site kitchen providing food to on-site employees at set hours – is evolving.
Sodexo needs to work with its clients pro-actively as a partner to adapt to changing circumstances and continue to meet evolving client needs. A lack of ability to adapt to the client’s current circumstances, an inability to transform our services to remain attractive to meet client/consumer demand, or any changes in client outsourcing strategy could mean that the client is not retained, possibly leading to:
Increasing consumer expectations around personalized and innovative services, healthy food choices and a comfortable environment; increasing consumer expectations in relation to Company business conduct and environmental impact.
“Empowered consumers” is one of 11 megatrends that Sodexo has identified in its markets. Consumers are increasingly voicing their opinions and clients are taking their opinions into account. Consumers expect more choice, more convenience, healthier options and socially responsible behavior from the companies from which they receive service. Specific examples that Sodexo has had to take into account include:
Moreover, the Covid-19 pandemic has accelerated the consumer empowerment trend, with consumers working remotely on a regular basis, or even full-time.
If Sodexo cannot adapt its consumer offer or cannot anticipate and meet consumer expectations for innovation and in relation to environmental impact or business conduct, its revenues, as well as its reputation, could be affected.
