Sodexo, Star Bazaar reach deal on meal passes

In a climbdown of sorts, Star Bazaar, run by Tata-owned Trent, has become the first hypermarket chain to again accept Sodexo and Ticket Restaurant meal passes.

They and other retail chains — Pantaloon, Reliance, Aditya Birla, Spencer's, etc — had stopped accepting the passes in lieu of goods bought by shoppers at their hypermarkets from the beginning of this month. The retailers had an issue with the providers over the commission charged.

"The meal pass providers have decided to lower the commission and we (Star Bazaar) have started accepting the passes from today,” said a person who works with the chain. When asked, a Star Bazaar spokesperson said: “Star Bazaar does not wish to comment.”

According to sources, the Raheja-owned Hypercity is still accepting the passes from shoppers and is in talks with providers over the commission. Sodexo charges 2.9-3.4 per cent to retailers on the bill, depending on volumes generated.

Retailers do not generate large volumes from the passes. Big Bazaar, the largest hypermarket chain, makes two per cent of its sales from these coupons. They argued they could not afford such commissions, given the thin margins in the goods and grocery business, of two to three per cent.

The response of other hypermarkets could not be ascertained. A senior executive with a city-based chain said: “I think most of the chains will start now and providers will have to reduce commissions.”

Amitabh Sinha, vice-president, marketing, Sodexo India, said: “We are engaging with all retailers. However, nothing has been concluded.” Sinha said the company was evaluating new service offerings as it expanded to new locations. “A few retailers leaving us will not impact our business,” he said, adding, “We have not increased our commission in the last two years and nor has the payment time been increased with any of these retailers.” According to Sinha, payments are made timely, by bilateral commercial agreement. Sodexo has a network of around 18,000 outlets and is expanding.

Another meal pass provider, Edenred, said the company maintained a long-standing and mutually beneficial relationship with retailers. According to an Edenred spokesperson, “With all our affiliates, acceptance of Ticket Restaurant Meal Vouchers is subject to a contractual agreement and the commercials are very well stated therein.” He added that “commercial issues between partners in such a partnership is nothing unusual”. Edenred is in an ongoing discussion with some of them (retailers) and its endeavour would be to continue the association with them as far as possible, the spokesperson said.

(With inputs from Kalpana Pathak)