Station retail prices blamed on DfT’s ‘lack of leadership’

Sky-high prices for food and drink at 200 stations are unlikely to be kept in check unless the Department for Transport makes it easier for competitors to challenge the near-monopolies of a handful of profit-driven global companies.

These are the findings of the Office of Rail and Road (ORR), in its long-awaited report into how passengers and station users have little choice but to pay up to £5 for coffee in a paper cup, and around £6 for a baguette or hot pastry. These prices are far higher than the High Street.

There is also concern that prices are set to be the same, regardless of the location.

ORR reveals that SSP (Select Service Partner), a UK-based company, has a third of the shop spaces and half of the £700 million annual income, operating under a host of names that sell side by side - including Upper Crust, M&S Simply Food, the Camden Food Co, and Millie’s Cookies. It also has interests in other businesses such as Starbucks and Burger King, which are franchised out.

This total is larger than all the next six largest players combined - including Costa Coffee and WH Smith.

While SSP’s business activities are not challenged, ORR asks why premises are rarely advertised when they become vacant.

It says the £100m a year earned by Network Rail (the principal landlord) is not transparent. And although the train operators share some of the money, they seem to show little interest because their contracts often have little time to run.

The ORR report wants the DfT “to provide a greater degree of strategic direction and support to station operators towards improving the way the market functions and what it offers to passengers…. prospective entrants are given very little chance to either be informed of an opportunity or to compete for it”.

Companies such as SSP often have their leases automatically renewed without competition (there have only been seven such instances out of 148 since January 2022), even though the leases can easily be terminated.

Sites are rarely advertised, and ORR wants to move to the use of estate agents and websites such as Zoopla and Rightmove.

The Rail Delivery Group will be tasked with co-ordinating the rail industry’s response.