The worlds largest meal coupon company is facing resistance from retailers.Sodexo needs to upgrade its business model.But may be vouchers have outlived their relevance
Whether you liked its wares or not,you didnt spare much thought to Sodexo Indias and the worlds largest meal coupon company.Customers went to stores,bought groceries,paid via coupons and felt happy about the tax-free perk.Until on New Years,in a seemingly coordinated decision,major retailers like Food Bazaar and Spencers Foodworld,put up posters declaring they wont accept Sodexo coupons anymore.Suddenly,a company few talked about became the subject of polarised online debate.One agitated customer wrote: I for one welcome this.I am sick of standing behind someone who counts 100s of coupons at the checkout counter.
The company calls it a short-term blip on the radar that wont impact its bright future.The retailers decision was quite sudden.We have responded by launching an aggressive affiliate network expansion programme.We have already added over 1,000 outlets in the past one month to make up for the outlets which have departed, says Amitabh Sinha,vice-president,marketing,Sodexo India.
But the flare up isnt merely about a bunch of retailers who think it is too tedious or expensive to accept meal coupons.Sodexos clockwork drill has been rusting a bit the payment recovery cycle elongates at times and margins sometimes jump during slump season but that can be addressed.
Already,the company has managed to turn around Tata-owned Star Bazaar with the promise of lower commissions.The question is: have the times rushed ahead of meal coupons Has the Sodexo business model lost relevance in the age of customised electronic cards and reward point programmes run by retail chains,and online coupons At stake in India is a network that links 25,000 merchants with 3 lakh customers who use Sodexo coupons.
