Olympics cut travellers’ appetite for SSP’s food and drink

SSP’s cafés, bars and restaurants in airports and train stations around Europe were not as busy as it had hoped over the past year, partly because the Paris Olympics put off travellers.
Sales in the group’s European business rose 5 per cent in the 12 months to the end of September, although that was mostly driven by new site openings.
SSP enjoyed “strong” trading at its sites in Spain and the other Mediterranean holiday destinations, but conceded that sales in France and Germany were “behind our expectations”.
Echoing what other airlines and restaurant and hotel operators have said in recent months, SSP’s trading in France was “negatively impacted by the Paris Olympics” over the summer. The industry had braced for a hit from people trying to avoid the Games, but it proved bigger than most thought.
In July, Air France-KLM, which owns the flags carriers of France and the Netherlands, warned of a hit of up to €180 million because of international travellers showing “a significant avoidance of Paris”, while residents were postponing trips until after the closing ceremony.
For SSP, emptier planes and trains meant fewer people passing through its sites. The extra security in France during the Olympics meant that even those who were still travelling had less time to spend eating and drinking.
The group blamed the underperformance in Germany on “weak trading” at its motorway service stations, which it is in the process of selling.
SSP was previously part of Compass Group, the world’s biggest contract caterer, but in 2006 it was sold to EQT Partners, the Scandinavian private equity firm. In 2014 it was offloaded via a £1 billion flotation on the London Stock Exchange.
Today SSP operates at airports and railway stations in 36 countries. It deploys about 550 brands, including its own, such as Upper Crust, Caffè Ritazza and Camden Food Co, plus third-party franchises such as Burger King, Yo! Sushi, Pret A Manger and Starbucks. It has 43,000 employees.
Europe was the sole drag for SSP in its financial year just gone, during which it enjoyed overall sales growth of 12 per cent to £3.4 billion. Excluding the impact of the strengthening pound, sales rose by 15 per cent to £3.5 billion.
The group is expanding rapidly in North America and Asia, where its sales grew 16 per cent and 24 per cent, respectively, last year. Its UK business is more mature but nonetheless delivered a 12 per cent increase in sales, the bulk of which came from improved like-for-like trading as air travel continued its post-pandemic recovery, while there were fewer strikes on the trains.
“There has been good trading momentum across our business throughout [our fourth quarter],” Patrick Coveney, chief executive, said. “Our North America, Asia Pac and Europe & Middle East regions have continued to perform ahead of, or in line with, our plan and we have seen a material improvement in the performance of our UK business. We have had challenges in some parts of our continental European business, which we are addressing.”
Despite the troubles in Europe, SSP still expects to deliver a full-year operating profit of between £200 million and £210 million when it reports its full-year results in early December. That would be about a third higher year-on-year and is about what City analysts had forecast.
SSP shares fell by 1¼p, or 0.8 per cent, to close at 156p, leaving them not much higher than where they were in the depths of the pandemic, when travel was all but banned.