| Source | Strength | Durability | Evidence |
|---|---|---|---|
| Scale (Entegra GPO EUR 38B) | Strong | High | 2-5% food cost advantage vs small operators |
| Switching Costs | Strong | High | 94% retention, 14-year avg client relationship |
| Brand | Moderate | Medium | B2B brand matters less; Compass brand equally strong |
| Network Effects | None | N/A | No network effects in contract catering |
| Technology | Moderate | Medium | 210 smart kitchens vs Compass AI in 50% of operations |
| Metric | Sodexo | Compass | Gap | Trend |
|---|---|---|---|---|
| Operating Margin | 4.7% | 7.2% | -250bps | Widening (was 220bps in FY2022) |
| Organic Growth | 3.3% | 8.7% | -540bps | Widening |
| Client Retention | 94.0% | 96.3% | -230bps | Widening |
| Tech Capex/Revenue | 2.0% | 3.5% | -150bps | Widening |
FM operates at ~3% margin vs food ~5.5-6%. FM grew 1.7% vs food 4.5%. Market assigns Sodexo (hybrid) the lowest P/E (10x) of any peer — lower than pure food (Compass 22x) and pure FM (ISS 13x). Compass divested FM and is rewarded.
IFM bundling (Integrated Facility Management) is a growing trend. Some clients prefer a single provider for food + cleaning + maintenance. FM provides revenue diversification and cross-selling opportunities.