Amtrak Eyes Ending Food & Beverage Losses

Amtrak contends that it has a plan to end financial losses on food and beverage service within the next five years, most of which it says are racked up by long-distance trains.

In inflation-adjusted dollars, Amtrak’s projected losses on food and beverage in the current fiscal year – which ended on Oct. 1 – is $74 million, a 30 percent decrease from the $105 million it lost in FY 2006.

Amtrak Inspector General Ted Alves has noted that Amtrak has reduced its food and beverage service losses “over the last several years” by improving management controls.

Amtrak President Joe Boardman echoed that sentiment in a statement released on Friday. “We have made steady and consistent progress, but it is time we commit ourselves to end food and beverage losses once and for all. Our plan will expand initiatives that have worked, add new elements and evolve as updated information and opportunities lead us to better solutions.”

Boardman attributed 99 percent of Amtrak’s food and beverage losses to dining car operations on long-distance trains. Cafe car service, he said, breaks even or covers its costs.

The locus of Amtrak’s plan is a new management structure that will consolidate operations and accountability for food and beverage into a single department.

Amtrak will establish a long-distance services general manager. Route directors will be responsible for profits and losses of specific trains, and will identify opportunities to cut costs and operate more efficiently.

Other steps that Amtrak expects to take include tying dining car staffing to demand, establishing metrics to assess service attendants’ onboard sales performance, taking steps to reduce spoilage, more closely tracking onboard stocking, regularly changing menus, and exploring new price and revenue management options.

One step Amtrak began taking last week involved testing touch-screen tablets in the dining cars of the New York-Miami Silver Meteor. Dining car servers will take passenger orders and print receipts with the tablets.

Next year, Amtrak will implement an electronic point of sale system nationwide that is currently used on Acela Express and California trains

This point of sale system is expected to make checkout and receipt printing in café and lounge cars faster, thus allowing onboard employees to spend more time on sales and customer service. It also is expected to provide real-time inventory status and more flexibility to introduce targeted pricing and discounts, including value and combo meals.

Also in 2014, Amtrak plans to test “cashless” food and beverage sales on certain routes in an effort to reduce transaction times, and cut accounting expenses and the risk of fraud or abuse.

Amtrak said other industries that have pursued similar initiatives have seen increased sales and that the model has been embraced by airline travelers. “I am confidant Amtrak will succeed in this effort just as we have in other areas and across a wide range of financial and operating performance metrics,” Boardman said.

Amtrak believes that eliminating food and beverage would cost it ridership and ticket revenue. Boardman said such losses might increase Amtrak’s need for federal financial support.

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