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Retail Refresh: A Look at the way One Healthcare Foodservice Management Company Reinvests in its Business

Healthcare foodservice has gone through a renaissance of sorts in the last few years. While many institutions have redone their main cafeterias and serveries, revisiting their retail outlets has become another important part of the refreshing process. 

Morrison Healthcare, an Atlanta-based foodservice management company that works with 650 healthcare facilities, follows a clear step-by-step process for completing what it calls its retail refreshes. The process includes understanding the client's interest, its vision, mapping the servery and retail setup, developing a refresh plan, reengineering the menu, implementing the program and measuring and analyzing results. A member of the Compass Group, Morrison completed 60 refreshes last year and has its eyes on a possible 30 more this coming year.

At Norton Suburban Hospital, Morrison worked on merchandising the menu items, such as the pizzas seen here, to help drive sales.At Norton Suburban Hospital, Morrison worked on merchandising the menu items, such as the pizzas seen here, to help drive sales."Reinvesting our foodservice business has become a priority for us not only as the right thing to do but also to incorporate new technologies for cooking, menu development and ordering," says Larry Tansky, senior director of retail. "Retail refreshes also allow us to build in added flexibility through both equipment and design. A lot of menu trends change over time as well as our demographics and flavor profiles, so we focus on those as we reinvest in our businesses."

For example, newer pieces of equipment, such as rapid-cook ovens that can meet throughput, speed of service and volume needs with less overhead and ventilation requirement may not have been available when some healthcare retail operations were first designed. Including these items opens up a world of opportunities for today's operators.

Here's a deeper look at some of the key steps behind Morrison's retail refresh process.

1. Understanding Your Client
"Before any refresh takes place, we look first to understand what is important to the client," says Tansky. Next, Morrison will explain the refresh program so that the client can become aware of the objectives and weigh in with goals. Quarterly business reviews also help open the communication pathway between Morrison Healthcare and its clients. The company offers a toolkit with templates for reporting.

"One interesting issue for many of our clients lately is the presence of food trucks as the biggest competitor," says Tansky. Many of the trucks will park in front of a hospital during peak meal times, essentially pulling away potential customers from the healthcare facility's foodservice offerings. As a result, Morrison has had to take a closer look at the types of food trucks appealing to diners — particularly Vietnamese, other Asian and Latin trucks — to develop new concept and menu changes.

2. Understanding the Diners
To ensure the retail refresh fits with the diners' wants and needs, Morrison's clients will first set up focus groups to test certain concepts, layouts and menu items. Surveys also help discover more about the customers' needs — what do they like to eat when they dine out? What do they eat at home? Morrison will then present potential concepts to the client.

Recently, at Norton Suburban Hospital in Louisville, Ky., a division of Norton Healthcare that feeds 1,750 employees in addition to its regular patient roster, Morrison sent around surveys and conducted focus groups to determine the demographics and desires of the customer base. "When we dialed into the customers, we found they skewed female between 30 and 50-plus years of age," says Tansky. "A majority were also very health conscious, but at the same time, they wanted a diverse menu and something quick that would also taste great."

Morrison introduced a seasonal foods area with an education series and chefs tables highlighting these and other so-called superfoods. The menu was also revamped to include more nutritious offerings such as meals made with whole grains as well as smaller portions for its snack bar and grab-and-go areas, which were expanded along with the hours to accommodate staff with limited time.

3. Mapping the Servery
After working with the client to determine new concepts, refreshing both the retail and core foodservice components of a healthcare facility involves mapping out the main servery to zero in on missteps while identifying opportunities for improvement.

From guest flow to the menu, add-on sales opportunities and overall profitability, examining these areas closely allows healthcare foodservice managers to eliminate ineffective menu items, increase covers and check averages, and optimize margins as a whole. Observing customers, reviewing each station for functionality and speed of service, and examining merchandising setups for proper promotion setups are also important steps in the review process.

Morrison provides its client with a checklist of stations and menu items, including breakfast and bakery, snacks and grab-n-go, entrée and action stations, deli, soup and salad, chef's tables, cash registers and dining sections.

By examining such areas as guest flow, the menu and more, Morrison and the team at Norton Suburban Hospital were able to better optimize the performance of this healthcare foodservice operation.By examining such areas as guest flow, the menu and more, Morrison and the team at Norton Suburban Hospital were able to better optimize the performance of this healthcare foodservice operation.

4. Implementation
With the plan in place, proper implementation becomes the key to longer-term success and measurable sales, says Tansky.

"We also look at upgrading the equipment where we can to be able to handle the added flexibility and diversity of menu items," he says.

At Norton Suburban Hospital, Morrison added digital signage with more detailed nutritional information for its dining customers, including hospital staff and patients alike, who were looking to eat more healthfully.

The company also looked to merchandising as a continuation of this healthy eating focus, introducing more nutritional snack items and "impulse" purchases like fresh fruit and granola bars at the registers and other points of sales. In the servery, Morrison replaced the current exhibition concept with cook-to-order authentic ethnic favorites to add more diversity to the menu offerings, and it replaced the main deli case with a made-to-order deli and sub shop for fresher items. Replacing the traditional entrée menu with more seasonal dishes and daily "FIT" combo meals, including added fruits and vegetables and upgraded salad offerings further brought the healthy eating message home.

5. Training
Training, including both back-of-the-house culinary and prep training and front-of-the-house customer service training, is the next step in proper implementation.

"One of the things we have learned is if we don't train both groups, our results are not as strong as if we just focus on one or the other."

Morrison has developed a customized program in conjunction with Compass Group to provide its 200-plus retail managers with the knowledge and tools to apply these new retail strategies. The six-month program consists of three parts, including marketing fundamentals, applied retail methodology and retail implementation training. In addition to a series of classes, participants apply their knowledge by completing "assignments" at accounts and measuring their impact.

Measuring Results
At Norton, in just 90 days since the refresh, average daily sales have increased by more than 5 percent while total retail sales have increased by nearly 2 percent. Sales per patient per day have increased by an impressive 38 percent, while both breakfast and lunch check averages separately have increased by 8.9 percent.

"By measuring sales and results as quickly as possible after the refresh, we can make changes based on what seems to be working and what isn't working," says Tansky.