Rail station outlets face clampdown on rip-off prices

[Iskra]

I've yet to find a railway station that matches a motorway service station for outright thievery

But they are compelled to offer toilets, snacks and hot drinks 24/7x365, which costs money to provide and requires a significant element of cross-subsidy. Additionally, they are often in the middle of nowhere therefore need to pay more to attract staff.

 

[N/100]

McDonalds is the odd one out at Leeds station, as a result it is often by far the busiest outlet in the entire station! (Sainsburys is also welcome at both Leeds and York although they do chuck a 10 - 20p price increase on quite a lot of items as a bit of a convenience charge!)

I actually can't think of any other railway stations with a McDonalds, obviously excluding the likes of King's Cross which has one virtually next door and London Victoria which has one in the weird 'shopping centre attached to transport hub' thing that London seems to like! Manchester Arena used to have one which you could access via Manchester Victoria station from memory

Waterloo, in the Colonnades.

 

[richard_S]

I’m interested to know the salaries of the team in ORR who will be conducting this research into the obvious. Reminds me of the big investigation the CMA ran, a decade or so ago, into the real conundrum of why there weren’t loads of bus operators in Eastbourne.

Bottom line: no, I don’t want to pay a slightly higher train fare, or slightly more tax, for the occasional benefit of a slightly cheaper drink/sandwich on railway premises. Unless ORR find a way to abolish economics, no ‘other’ is going to make the price premium disappear.

The best way is for manufacturers to print the retail price on the packet or box

But they are compelled to offer toilets, snacks and hot drinks 24/7x365, which costs money to provide and requires a significant element of cross-subsidy.

The Gents toilet in Market street in Llangollen wants 40p to use. I went in a pub.

 

[Howardh]

Many years ago I looked into opening a small kiosk at a station site but when I saw what they wanted for rent idea went straight into the bin.

There's space on Bolton Trinity Street for what is/was supposedly gonna be a bar. No idea what the rent would be, but the landlords I've spoken to who might be interested state it's on platform 4/5, the "wrong" platform; so they wont rent even at a discount. Means there are no pax facilities there, save for a vending machine (I think) so everyone has to cross the bridge to the cafe on 1/3....which closes by the time I get there around 7pm. Oh, it used to sell cans of beer, but not any more. Vapes yes, beer no .

So there's a busy station with potential if there was joined-up thinking. Bar/cafe on platform 1/3 until late...but if the rent's too much it won't happen. Meanwhile on the bus station Greggs has increased it's hours.

 

[richard_S]

There's space on Bolton Trinity Street for what is/was supposedly gonna be a bar. No idea what the rent would be, but the landlords I've spoken to who might be interested state it's on platform 4/5, the "wrong" platform; so they wont rent even at a discount. Means there are no pax facilities there, save for a vending machine (I think) so everyone has to cross the bridge to the cafe on 1/3....which closes by the time I get there around 7pm. Oh, it used to sell cans of beer, but not any more. Vapes yes, beer no .

So there's a busy station with potential if there was joined-up thinking. Bar/cafe on platform 1/3 until late...but if the rent's too much it won't happen. Meanwhile on the bus station Greggs has increased it's hours.

I was looking at Sale and Brooklands stations when they shut to convert to metro link. Both sites needed a lot spending on them before being able to open to the public. It was the sky high rents they wanted put me off. I see they are now open must have lowered the rents to get people to rent them.

 

[Bishopstone]

The best way is for manufacturers to print the retail price on the packet or box

It's illegal for manufacturers to tell retailers the price points at which their products must be sold. If you see sweet wrappers (etc) with prices pre-printed in convenience stores (typically), that's a mutual benefit marketing agreement made between the brands and the buying groups who supply the stores. Any manufacturer who tried to dictate pricing strategy to the likes of SSP and Sainsbury wouldn't get very far. The brands have bigger profit margins than the retailers - say, 15% versus 5%.

 

[87 027]

I’m interested to know the salaries of the team in ORR who will be conducting this research into the obvious.

Salaries of all ORR staff (indeed all civil servants) are public information on the data.gov.uk website and the information is supposed to be updated every 6 months

Organogram of Staff Roles & Salaries - data.gov.uk

[Link is to a landing page from which the data can be downloaded in CSV format]

 

[richard_S]

It would not surprise me if the likes of SSP dont pay anywhere as much rent for a station site as an individual would.

 

[tomuk]

WH Smith made its money from distribution of newspaper and magazines, and from the higher prices at their travel locations (railway, airports, motorway services). With the ever decreasing sales of newspapers and magazines, I do wonder how profitable they are going to be in years to come. At locations that offer free water refills, and the removal of liquid restrictions at airports, that cash cow could be coming to an end too.

Maybe their only sales will be selling sweets to children in the future! High street stores are already near dead, and many surviving only because of reduced rent (such as being an anchor store for a shopping centre) or having a post office.

Smiths broke in two years ago the distribution arm has nothing to do with shops anymore and despite falling demand has got very good at maximising profits from the newspaper and magazine distribution contracts.

 

[Doctor Fegg]

The "outlet" with the most flagrant "rip-off prices" at any railway station is, of course, the ticket office. It would be nice to think that the Office of Rail & Road was concentrating its energies on that rather than the price of a skinny latte or Whopper Meal.

 

[Iskra]

It would not surprise me if the likes of SSP dont pay anywhere as much rent for a station site as an individual would

I have seen the rents of a large companies outlets at two intercity stations in Yorkshire, and they are eye-watering when compared to a similar, even larger outlet in a more normal retail setting. I doubt an individual would be charged more, but they may be less able to deal with the costs and challenges of operating in a rail environment and probably don’t have the ability to cross-subsidise as required from other elements of their portfolio to help deal with revenue loss due to pandemics, strikes, service disruption etc.

The "outlet" with the most flagrant "rip-off prices" at any railway station is, of course, the ticket office. It would be nice to think that the Office of Rail & Road was concentrating its energies on that rather than the price of a skinny latte or Whopper Meal.

Touche

 

[Failed Unit]

You are paying a bit for convenience. The Costa in Kings Cross is more than the one in the Premier inn opposite. (Can’t remember if the one on the tube station is normal prices as well). If i have time I will take the 5 minute walk. If I don’t I will pay the premium. That said sometimes you get served quicker and back to the station even with the walk.

What is interesting is the independents don’t seem as bad. The shop in Welwyn Garden City is not that much more expensive they I would consider the very short walk to the shopping centre. Motorway services are the largest gap in my experience.

 

[michael74]

London Bridge has one in the station premises though access is from the street. There’s one at Waterloo, one by platform 2 in Victoria and one upstairs at Liverpool Street. Paddington had one but it’s gone now.

Paddington McDonalds on Platform 1 was lost to the Liz Line entrance, its now on Praed St almost opposite the station entrance ramp...... My go to for food prior (except possibly a cheeky Krispy Kreme by the Underground gateline ) to my trip back to South West, rather than paying over the odds for the food in Paddington itself.

 

[richard_S]

I am in the middle of North Wales (Bala) we have a co-op and a Spar! I am sure they have a competition to see who can charge the most for goods.

 

[DavyCrocket]

You are paying a bit for convenience. The Costa in Kings Cross is more than the one in the Premier inn opposite. (Can’t remember if the one on the tube station is normal prices as well). If i have time I will take the 5 minute walk. If I don’t I will pay the premium. That said sometimes you get served quicker and back to the station even with the walk.

In King’s Cross St Pancras, The Costa and Boots next to it have closed and the units are empty. As is the Starbucks.

 

[IndianPacific]

It would not surprise me if the likes of SSP dont pay anywhere as much rent for a station site as an individual would.

SSP is likely on a concession type contract - so a percentage of the profit will be going to whoever manages the station they’re in. Not a fixed rent.

 

[RailWonderer]

You are paying a bit for convenience. The Costa in Kings Cross is more than the one in the Premier inn opposite. (Can’t remember if the one on the tube station is normal prices as well). If i have time I will take the 5 minute walk. If I don’t I will pay the premium. That said sometimes you get served quicker and back to the station even with the walk.

I've only just noticed it two weeks ago (I exit the tube station next door to it and cross the street into Kings Cross) and never knew it was there, and I've been paying more for years now.

 

[Failed Unit]

In King’s Cross St Pancras, The Costa and Boots next to it have closed and the units are empty. As is the Starbucks.

The one upstairs in King’s Cross? I thought the Starbucks was getting refitted. Last few times I have gone through it was late evening. So all retain units were closed. Surprised as all shops in the station had a reasonable footfall. But that is of course different to making any money.

 

[Jimini]

Smiths broke in two years ago the distribution arm has nothing to do with shops anymore and despite falling demand has got very good at maximising profits from the newspaper and magazine distribution contracts.

In 2006, no less. Been a while.

 

[Kite159]

But they are compelled to offer toilets, snacks and hot drinks 24/7x365, which costs money to provide and requires a significant element of cross-subsidy. Additionally, they are often in the middle of nowhere therefore need to pay more to attract staff.

Especially as in general those sorts of areas don't have much in the way of public transport serving them, so any staff will need to have their own transport.

As for station shops being expensive, its just the way it is. At least in some places there is a cheaper alternative close by (i.e. a Tesco Express/Sainsburys Local, even a Co-Op) for meal deals for food. After-all why pay Smiths £5 for a sandwich meal deal when you can pay £3.50 from Sainsburys around the corner which has a bigger range.

 

[Metal_gee_man]

SSP is likely on a concession type contract - so a percentage of the profit will be going to whoever manages the station they’re in. Not a fixed rent.

Yep, that's quite a regular thing, I worked for a Foreign Currency Exchange at Eurotunnel, the exchange rates were abysmal, it wasn't the companies fault it was the turnover based rent (which was horrendous) charged by Eurotunnel that forced their hands, the same applies at Gatwick, Heathrow etc...etc

There was a figure that BAA (the owners of Heathrow) reported on their P&L (when I last looked) a few years ago that made my head spin, my same employer had multiple outlets in all the terminals at Heathrow and the income from the turnover based rent was into the hundreds of millions, their retail income was very similar.

When I can find the figures I'll add to this post

Anyway to conclude, transport hubs must stop operating as profit making monsters (especially the Network Rail offshoot that handles the retail side) to stop the public being ripped off, until then we are never going to see a change

 

[jon0844]

Anyway to conclude, transport hubs must stop operating as profit making monsters (especially the Network Rail offshoot that handles the retail side) to stop the public being ripped off, until then we are never going to see a change

Plenty of people defend the pricing and say people have a choice to shop elsewhere, or not shop at all, so I don't think they need to worry too much.

As long as they are always busy, why worry about those who shop elsewhere? Chances are, if more people queued then there would a chance of people missing trains and people would be put off by those queues. So it probably all works itself out, and they get to collectively make more money.

 

[Metal_gee_man]

Plenty of people defend the pricing and say people have a choice to shop elsewhere, or not shop at all, so I don't think they need to worry too much.

As long as they are always busy, why worry about those who shop elsewhere? Chances are, if more people queued then there would a chance of people missing trains and people would be put off by those queues. So it probably all works itself out, and they get to collectively make more money.

I think it's evidenced that an outlet can charge the going high st price and still be profitable in a station, what tends to happen is if its the right price or a few pence off people will buy it and volume not % profit keeps the outlet afloat, if you know that your Whopper is £3+ over priced in a station are you going to buy it...generally not, that means lower footfall to that outlet.

My argument and many others is upping the footfall to your outlet doesn't need to be a race to the bottom, yes it might require a price increase of 50p for example over the high st to cover the higher rents, but it shouldn't result in the outlet being deluged with thousands of new customers but looking at it this way if an outlet over prices itself you have the scenario below

Zero customers X £3 = £0.00
50 customers X 50p = £25.00

 

[jon0844]

Until people stop shopping there, I can't see much changing. People on this forum are almost certainly going to be shopping around, but a lot of people won't want to leave a station. They're nervous enough navigating their way around the station itself than getting lost outside. Then you have the people who turn up last minute and wouldn't even have time to shop around.

Someone is buying those stupidly overpriced bags of Haribo from WH Smith or else they'd cut the price!

It's the same in supermarkets. They argue they're not profiteering, but we now see in the US companies like Kraft Heinz talking of increased profits on lower volumes of sales. Firms are bragging to shareholders how they've managed to price gouge in a time of economic instability, and we only need to look at oil firms who reduced supply to get prices up and have ALL made record profits in the last year.

I have little faith in regulators and Government, who drag their heels. Even when they know something is bad, they take their sweet time to allow businesses to make as much as possible for 'the game is up' and by then, they'll have found another way to make money and the authorities will move at a glacial pace once more - perhaps even delaying legislation because there are supposedly more important things to worry about right now.

So once again, who has the power to change things? You and I. We stop shopping at certain places, or stop buying specific products, and we can make a difference.. but I don't see any evidence of that at stations or airports. I don't often visit motorway services but when I do, I have to say that WH Smith seems pretty quiet compared to years gone by, but everyone is happy to spend money on a Costa.

 

[Bald Rick]

Zero customers X £3 = £0.00
50 customers X 50p = £25.00

But the point is people are paying the higher prices, and in droves!

When I was over there, the WH Smith’s at Victoria was their highest revenue branch in the country. The Boots at Liverpool Street was their third highest revenue in the country. And so on.

It’s called the free market - if people aren’t prepared to pay, they go out of business- some do, but most don‘t.

 

[AndrewP]

I believe that station units are on what is known as a turnover rent (they certainly used to be) where a base rent is paid plus a percentage of sales.

Competition for space is high due to footfall just as any retail location but if this drops so does demand for space.

I can see no reason for SSP getting an advantage from a landlord however their knowledge of working in these locations gives them a competitive advantage over those with less experience

 

[Lost property]

Especially as in general those sorts of areas don't have much in the way of public transport serving them, so any staff will need to have their own transport.

As for station shops being expensive, its just the way it is. At least in some places there is a cheaper alternative close by (i.e. a Tesco Express/Sainsburys Local, even a Co-Op) for meal deals for food. After-all why pay Smiths £5 for a sandwich meal deal when you can pay £3.50 from Sainsburys around the corner which has a bigger range.

Which, by one of those coincidences, is exactly what I paid from the outlet opposite GLC during my recent transit through the station albeit I would say, GLC isn't truly representative with only a limited number of brand outlets and a wealth of competition quite literally across the road.

As has already been mentioned, transport locations are a gift for organisations charging significantly higher prices due to a captive, albeit transitory, clientele although it does beg the question, that, if they reduced their prices, would they sell more ?

 

[43066]

But the point is people are paying the higher prices, and in droves!

This also answers the point made in post #70!

 

[stuu]

I've yet to find a railway station that matches a motorway service station for outright thievery

£2.79 for a 500ml bottle of diet coke from the buffet on platform 10 at Bristol TM earlier this year

 

[Sir Felix Pole]

Beer, another beverage of great importance, is also outrageously priced (to a Northener at least) at SSP and other outlets on stations. Manchester's Victoria and Piccadilly are particularly bad - unfortunately many of the traditional boozers, as an alternative, in the immediate area have long since gone.