BC Dining Explains Food Pricing Strategies
Prices Are Chosen Based On Numerous Factors, Admins Say
Published: Wednesday, February 1, 2012
Updated: Wednesday, January 9, 2013 18:01
Boston College Dining Services (BCDS) has been recognized numerous times as one of the best in the nation. Just last year, it was awarded the Massachusetts Restaurant Association Foodservice Operator of the Year prize. And while students might agree that the food is good, they certainly know that it is not cheap.
A 20 oz. bottle of Powerade, for example, sells for $2.59 in McElroy Commons' Carney dining room. At the Star Market on Beacon Street, a 32 oz. bottle of Powerade—12 oz. more than the BC version— sells for $1.19.
"I don't have to make money, but I have to break even," said Helen Wechsler, head of Dining Services. "If I don't, I become a burden to the University, and your tuition is supposed to go to your education, not the food."
Part of this ability to break even is because of the BC meal plan. Of the 7,200 beds available on campus, 5,000 of them are attached to a mandatory meal plan, which cost $4,724 for the 2011-2012 school year.
"While students feel that that's a lot of money, it's what's absolutely necessary to run the business to break even," Wechsler said, adding that in recent years, parents and students have asked for bigger options for the mandatory meal plan in addition to the Residential and Flex plans and optional Dining Bucks.
Another factor in the price of food in a BCDS cafeteria is the way in which they are run. According to Wechsler, grocery stores such as Star Market operate on a very different scale than BCDS.
The markups on food items sold in BC dining halls have to be higher than those of grocery stores, not only because they are not sold or offered in the volume that a supermarket is able to, but also because such stores do not have the same overhead costs as BCDS.
"They work on tiny markups on all of their food because they sell in volume," Wechsler said. "Not only do they buy it at a better price because they're an international company with international procurement negotiations, but then they only [have to] mark that up a teeny tiny bit."
BCDS spends approximately 37 percent of its revenue on purchasing food. Because BCDS is considered an auxiliary of the University, it must pay rent for each dining hall it operates. This accounts for approximately 7.7 percent of revenue. About 12.3 percent of revenue is spent on facility maintenance and operating costs, such as water, power, and silverware.
The biggest expense for dining services, however, is its employees, 250 of which work full time. Approximately 32.7 percent of revenue is spent on employee salaries, while 10.7 percent of revenue is allocated for fringe benefits. This accounts for about 43.4 percent of the total BCDS costs per year.
"If you look at these against national restaurant industry standards, we're very competitive until it gets to labor and fringe," Wechsler said, "because BC is a Jesuit- Catholic school that pays a fair living wage, and every employee gets the same benefits."
Every employee of BCDS is guaranteed healthcare benefits, paid vacation and sick days, guaranteed workweeks, and the opportunity to take University classes free of charge.
"When I talk to students I say, ‘Look, you've traveled all over the world on service trips doing amazing things, and you come to this school I hope in part because of the values it imparts as a Jesuit-Catholic institution,'" Wechsler said. "Supporting BC Dining is supporting the mission of the school because of what we represent to our employees. I feel really good about it."
Wechsler said that in order to cut costs, the current BCDS system would have to be redesigned.
"If I did little mini marts, I could lower the price because it would change the whole picture of doing business," Wechsler said. "What it comes down to for me is space: where would I do it? We're working on it."