On Monday, Sodexho delivered a presentation to the Union Executive Board proposing price increases for the 2007-2008 academic year. These increases deal with Sodexho’s two dining locations in the Union: the McNeil Room and the Rathskeller. The proposed price increases will account for approximately a 2 percent increase in revenue at these locations, which translates to an increase of 10 to 20 cents for most of the affected products.
Sodexho prices are reviewed annually according to Union Dining Director Rob McIntosh. Due to policy regarding prices in the Student Union, all price changes must be approved by the Union Executive Board. This policy also applies to Father’s Convenience Store, the Campus Unisex barber shop, Ben & Jerry’s, and any other business that operates out of the Union.
By contract, Sodexho cannot increase its prices in the Union by more than the Consumer Price Index, a national benchmark of inflation computed by the U.S. Bureau of Labor Statistics. As of January this year, the CPI was 3.15 percent. With projected sales for the 2006-2007 academic year totaling $1.35 million, Sodexho could request price increases projected to generate an additional $42,496.93 in revenue. The overall package proposed to the Executive Board requested increases totaling $26,883.72, about 60 percent of the allowable increase.
“The higher prices are due to national effects, really,” said Executive Board Class of 2008 Representative Abderrahmane Benghanem. “Sodexho is not just trying to increase their profit here, but is instead making sure it can cover its rising costs. The increases may seem large to some, but they are still lower than the CPI.”
According to McIntosh, Sodexho uses a program called “Right Pricing” to determine how much a product costs in its entirety, including costs of raw foods, labor, and packaging. Sodexho is then able to compare how much they are charging for the product to how much they make from it. The products that are not holding their own in food cost percentages are the ones being targeted for the increases, said McIntosh.
Most of the price increases are between 10 and 20 cents. The largest price increase of 50 cents is for the halal burger with cheese, which currently costs $2.29. According to Director of the Union Rick Hartt ’70, the increases proposed by Sodexho take into account increases in produce costs, transportation, and other factors. Hartt’s favorite item, the veggie cyberwrap, will be subject to a 50 cent price increase due to these factors.
Last month, Sodexho began advertising its meal plan rates for the next academic year which includes the Commons, BARH, and Russell Sage dining halls. The cost for the Platinum Plan is $4,792, an increase of five percent over this year’s cost of $4,562.
