Client retention drives a strong start to the year for Compass GroupClient retention drives a strong start to the year for Compass Group

The key strategy for foodservice provider Compass Group as the 2025 fiscal year takes off is maintaining strong growth through strong retention and new business. To that end, the company wrapped up the first quarter of the fiscal year with a strong performance in all regions furthered by a continuation of strong outsourcing trends.

The company reported a 9.7% growth in organic revenue in the U.S. and a 9.2% for the company overall. The company attributes this success to both strong new business and the retention of established clients.

The foodservice provider is not overly concerned with the new Canadian and Mexican tariffs imposed by the Trump administration. In a conference call to investors on Feb. 6, Dominic Blakemore, the company’s CEO said that 85% to 90% of its purchasing is sourced in the U.S., so they aren’t expecting to see much of a financial impact.

“Look, under the last two administrations, we've performed very strongly. We say, seeing no reason why that should change,” he said. “And if we were to see an inflation in any way, look, I think we've now demonstrated our ability to both mitigate and price. And of course, when we see inflation, it's an opportunity for us to widen the value gap.”

Blakemore also said that inflation accelerates first-time out-sourcing for foodservice management, which could potentially lead to new client wins.

Another large foodservice provider, Aramark, which released its earnings results in February, had a similar perspective on the change in administration.

Blakemore said that the business continues to benefit as the trend of returning to the office continues to grow. This also seems to be a common trend for other foodservice providers with both Aramark and Sodexo, both making note of this in their recent earnings reports.

Efficiency through using new technology was another driver of Compass’ success in the quarter, said Petros Parras, the chief financial officer for the company.

“I think what we're realizing now beyond the client and consumer investments we have made, and we see great participations captive audience, we're realizing a very good opportunity for us, where it goes to our operations, where it goes to unit managers, how we enable our teams to do their job more efficiently faster,” he said. “So, we can get better commercial outcomes, and you will see some of this for us in the future.”

One such technological investment is the Intuit Arena at the L.A. Clippers, which offers a completely frictionless, tech-driven experience for diners. The company also sees room for the use of AI for back-office operations through automation.

For the full fiscal year, Compass expects to see organic revenue growth above 7.5%

“We're really pleased with our start the year. As we continue to deliver on our strategic priorities, the business is in great shape, and we're really excited about the future,” said Blakemore.