Aramark vendors facing price cut demand

10 June 2011

11 June 2011 | Lindsay Clark

Food services and catering firm Aramark is asking some of its suppliers for a 12 per cent price cut.

The firm, which provides menus for schools, business and events, said a benchmarking exercise had identified opportunities to reduce costs, including the reduction and consolidating existing spend into fewer suppliers, it said in a statement.

In a letter to vendors seen by SM, Aramark makes clear it expects them to contribute by reducing prices, in order to become strategic suppliers.

“The company sees this more as an opportunity than a threat and the letter emphasises that the process ‘will ultimately end in fewer, higher volume suppliers delivering fewer items through a consolidated distribution network’,” a company statement said.

As part of this approach, attention is currently focused on secondary suppliers, while food suppliers, which could directly impact on clients, are excluded, the company said.

“Aramark is determined to offer best value to our clients and constantly reviews all costs, especially those which do not directly add value to those clients or our consumers,” it said.

“In general Aramark takes an individual approach with suppliers, but the number and variety in this particular group mitigates against this, especially given the size of the gap identified and the pace at which our clients would expect it to be addressed,” the company said.

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