Catering giant Compass has seen sales slump by a third amid the pandemic as its free school meals hamper business looks to rebuild its tarnished reputation after an outcry over poor standards.
The group reported revenues tumbling by 33.7% in the last three months of 2020 as the coronavirus crisis continued to batter the global hospitality industry and the firm’s school and workplace canteen services.
It has also faced a storm of controversy surrounding its Chartwells free lunch parcels business after images showing the low standards of its food parcels were widely shared on social media.
The scandal prompted Prime Minister Boris Johnson to admit the offering was “disgraceful” and saw Chartwells apologise profusely last month.
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Compass has pledged to cover the cost of providing free breakfasts to all children currently receiving a Chartwells lunch parcel from January 25, as well as lunch parcels through the February half-term holidays.
Mr Johnson said last month the companies which supplied the much-criticised meal offerings to families during school closures had been “hauled over the coals”.
Compass said since an internal investigation, it had taken measures to address issues, such as improved supply chain processes, additional guidance and resources for its employees, and stronger quality assurance checks.
It added: “We recognise that the quality and quantity of some food parcels fell short of our usual high standards.
“We have apologised to everyone who has been affected.”
Its first-quarter update showed the ongoing impact of the pandemic on the wider business, while it also cautioned over ongoing pressure on sales as Covid-19 restrictions remain in place globally.
It said: “Although the news around vaccinations is encouraging, the pace of volume recovery remains uncertain.
“As we enter the second quarter with varying lockdown measures in place across our key markets, we anticipate that second-quarter revenues and volumes will be broadly in line with the first quarter.”
But shares lifted 4% as it said profits margins are set to improve despite the hit to revenues.
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