University catering teams are facing a difficult contradiction. They are under increasing pressure to deliver commercial returns, while being expected to enhance the student experience, support wellbeing initiatives, deliver social spaces, drive sustainability agendas and reinforce institutional values.
The challenge is not simply that expectations are growing. It’s that, in many cases, there is still a lack of clarity around what universities actually want their catering operations to achieve.
Is catering primarily a commercial function? Or is it a strategic service that supports recruitment, retention, wellbeing and community engagement?
For many universities, the answer is currently ‘all of the above’ – but without a clearly defined balance between competing priorities.
The pressure on university catering has never been greater
Catering teams have had to adapt to the new financial realities of life – reducing costs where possible, introducing service innovations, reviewing pricing strategies and refreshing product offers.
At the same time, investment into estates and environments has often slowed or stalled, leaving many teams trying to improve performance within ageing facilities and making do, as is the caterer’s way, with what they have.
Yet despite these efforts, many university commercial and catering teams are beginning to reach a critical point: there is only so much optimisation that can be achieved with the resources available.
The fundamental question universities now need to answer
As pressures continue to grow, this is the moment when catering leaders need to ask university executives a more strategic question:
What do you actually want your catering department to be?
- Should catering focus primarily on maximising commercial return? Or should it prioritise student experience and wellbeing, even where margins are tighter?
- Should university food spaces primarily serve students? Or should they become broader social, collaborative and community hubs?
- Should catering departments continue dedicating significant resources to internal hospitality and events? Or should those resources be redirected towards other services?
- Should catering be highly experiential and aspirational? Or should it focus on affordability and accessibility above all else?
The answers will vary significantly depending on each university’s size, location, demographics and wider strategic objectives. But what is becoming increasingly clear is that universities cannot continue expecting catering teams to achieve every objective equally without defining priorities.
Catering’s value goes beyond pounds and pence
A big challenge universities face is that the true value of catering cannot be measured purely through a profit and loss account. A successful university catering operation does far more than generate revenue.
It creates employment opportunities within local communities. It provides flexible work for students, often at Real Living Wage levels. It supports local supply chains and regional producers. It creates spaces where students socialise, collaborate and decompress. It reinforces university values around sustainability, inclusion and wellbeing.
As an extension of the university experience itself, assessing the catering solely through a commercial lens risks overlooking the wider institutional value it delivers.
Why clarity matters more than ever
Universities need a more evidence-based understanding of where their catering operations currently sit – both financially and operationally – and whether that position aligns with institutional ambitions.
We work with universities to help crystallise the decisions they are facing around commercial performance, student experience and operational sustainability. Through benchmarking, operational reviews and strategic consultancy, we help universities understand:
- Where their catering operation currently sits on the spectrum between commerciality and experience
- How their performance compares operationally and financially
- Whether resources are aligned to institutional priorities
- Where operational pressures are creating unsustainable expectations
- What opportunities exist to improve efficiency, experience or commercial outcomes
There is no single ‘correct’ model. Some universities may choose to prioritise affordability and student wellbeing, accepting lower commercial returns as part of a broader institutional strategy. Others may pursue a more commercially driven approach to generate vital income streams that support wider university operations.
Mark Kassapian, Managing Director at Litmus Retail, says: “The sector is approaching a turning point. University catering teams have shown enormous resilience over recent years. But many are now approaching a point where further efficiencies and commercial gains cannot realistically be achieved without clearer strategic direction and investment.
“The universities that will navigate this most successfully are likely to be those that stop viewing catering simply as a transactional service and instead define the role they want it to play within the wider university ecosystem. It’s about understanding where the right balance lies for each individual university.”
To explore how Litmus Retail supports universities with benchmarking, operational reviews and strategic consultancy across catering and commercial services click here.
The Litmus team
