Select Service Partner - Unfair Monopoly

[61653 HTAFC]

Back at the start of the most recent First TPE franchise, there were plans to replace the long established independent cafe on the island platform at Huddersfield... presumably with an identikit SSP outlet. Luckily, there was enough protest from regulars that these plans were axed- instead a small Pumpkin kiosk was installed at the top of the subway stairs, which only did any significant business if the cafe was closed.
Sadly I suspect that coupled with the impact of Covid, the independent cafe probably won't survive the upgrade. One can only hope that SSP have already bought the farm by the time the work is done!

 

[py_megapixel]

Back at the start of the most recent First TPE franchise, there were plans to replace the long established independent cafe on the island platform

Which station?

 

[61653 HTAFC]

Which station?

Oops! Well spotted... Will edit

 

[XAM2175]

We can complain about the prices of things (and people obviously do), but Network Rail have a duty to get good value for taxpayers/ farepayers by getting a good revenue from things like leasing the catering sites

This is the answer right here. NR's obligation is to take the highest possible rent, not install the 'best' possible provider in the eyes of passengers.

It mightn't be the answer you want to hear, but it is the answer.

 

[alistairlees]

This is the answer right here. NR's obligation is to take the highest possible rent, not install the 'best' possible provider in the eyes of passengers.

It mightn't be the answer you want to hear, but it is the answer.

It’s an answer, not the answer. It all depends on what your strategic objectives are.

 

[43096]

LNER is now Gate Gourmet, which has nothing to do with SSP or Rail Gourmet (despite the similar name).

Although historically Gate Gourmet (aka Gate Gormless in the airline industry) and Rail Gourmet (aka Rail Gormless) were under common ownership - Swiss Air - in the late 1990s, which is where the similarly naming presumably stems from.

 

[XAM2175]

It all depends on what your strategic objectives are.

Who is the "your" to whom you refer?

NR administer the commercial leases for many of the stations under discussion in this thread. NR's strategic objectives include reducing their dependence on subsidy; indeed the law as it currently stands requires that it be one.

So long as SSP's operations don't meet the definition for a prohibited monopoly - which to all appearances they don't at the present time - or until NR's objectives are formally changed, this is the reason that stations are filled with SSP retailers.

 

[alistairlees]

Who is the "your" to whom you refer?

NR administer the commercial leases for many of the stations under discussion in this thread. NR's strategic objectives include reducing their dependence on subsidy; indeed the law as it currently stands requires that it be one.

So long as SSP's operations don't meet the definition for a prohibited monopoly - which to all appearances they don't at the present time - or until NR's objectives are formally changed, this is the reason that stations are filled with SSP retailers.

GBR, as will emerge in (or as a result of) the Whole Industry Strategic Plan (WISP). I'm not saying that this will change the strategic objective in this case - but it could.

Network Rail is not obviously doing a good job of reducing its dependence on subsidy in any case.

 

[XAM2175]

Network Rail is not obviously doing a good job of reducing its dependence on subsidy in any case.

Well they're hardly going to do any better by ditching SSP in favour of lower-paying tenants!

 

[tbtc]

So long as SSP's operations don't meet the definition for a prohibited monopoly - which to all appearances they don't at the present time - or until NR's objectives are formally changed, this is the reason that stations are filled with SSP retailers.

We accept that Network Rail has a monopoly on owning stations, we accept that Network Rail has a monopoly in many areas, so I don't know what people on here want Network Rail to do...

a) accept lower leases, in the hope that this will attract some independent places to win bids (even though there's nothing stopping them from bidding as things stand, or for SSP to still bid most)
b) only allow one party to operate a certain proportion of station coffee/sandwich shops, let's say one firm can't operate more than a third? But we know that the idea of spreading train ownership between three ROSCOs didn't drive prices down significantly, it just created an effective cartel. If we care most about the service that passengers get then would this actually make much difference? e.g. the motorway service stations aren't all operated by one firm but they all charge big money at their sites because they know that people have no other option - if you pay £3 for a cup of coffee then people will charge you £3 for a cup of coffee
c) find some new revenue streams to make up for the reduction in leases (given that any Network Rail income essentially comes from the Taxpayers or Passengers, and we don't want either of these to have to pay more just to save people a few pence on a "Cornish" pasty

Maybe Grant Shapps will be reading this and his next distraction tactic will be to suggest that "wouldn't it be nice if cafes on train stations were more like Farmers Markets, and you could have locally sourced organic foods with lashings of ginger beer, just like in t'good old days" - that'd generate a lot of favourable coverage from blowhard newspaper columnists and keep his boss's shenanigans off the front page for a news cycle or two!

It's funny how the mood on here seems to be that we should have one provider of trains, with a "British Rail" that operates everything, but we can't allow one firm to dominate most (but not all) coffee shops on platforms... for me, I'd be more worried about the monopoly power of the former, rather than focussing so much on who sells you your coffee!

Network Rail is not obviously doing a good job of reducing its dependence on subsidy in any case.

What do you expect them to do though? They have these sites that they can lease - they have to bring in some revenues to counter the billions of subsidy that they require

 

[D6130]

It's funny how the mood on here seems to be that we should have one provider of trains, with a "British Rail" that operates everything, but we can't allow one firm to dominate most (but not all) coffee shops on platforms... for me, I'd be more worried about the monopoly power of the former, rather than focussing so much on who sells you your coffee!

I seem to remember that 'back in the day' British Rail had a monopoly on station food and drink outlets through their Travellers' Fare subsiduary. Station bookstalls were usually run by W H Smith - or in Scotland by John Menzies - but in those days they weren't allowed to sell food and drink, with the possible exception of sweets and chocolate bars, etc.

 

[Brissle Girl]

I think that this has a lot to do with it - there's not a big enough market for multiple outlets in an era where people have huge numbers of non-station options for a snack in most city centres and the idea of buffet cars on most InterCity trains feels quaint

We can complain about the prices of things (and people obviously do), but Network Rail have a duty to get good value for taxpayers/ farepayers by getting a good revenue from things like leasing the catering sites - who pays for the reduction in Network Rail's income if they are forced to accept lower bids for sites, and what guarantee is there that this "saving" to catering companies will be passed directly to consumers (since there's often very little correlation between the cost of a meal and the cost to provide it - you charge £3 for a hot drink because that's what enough people will pay for it rather than it being determined by the rent you pay)?

Catering at railway stations is likely to be something fairly niche that only a handful of organisations could ever touch, in the way that there's nothing stopping other firms trying to set up their own motorway service stations but Roadchef/ Welcome Break/ Moto have got the market pretty much sewn up (the fact that people rave about how good the independent Tebay site is just shows how uniformly banal the rest are)

And don’t forget Gloucester and Cairn Lodge services, which are owned by the same operator as Tebay, the latter being the purchase of an existing site a couple of years ago. Let’s hope they buy a couple more in due course to give a bit more choice.

 

[Bletchleyite]

To give SSP their credit, things aren't perfect and prices can be a little high, but station catering is far better in the SSP era than it was in BR days - M&S Food being by far the best addition in my view. Casey Jones burgers? Ugh. And they were overpriced too. And unless you're going to get the artisans in, a generic latte is a generic latte, doesn't overly matter if it's Ritazza or the 'Bucks.

I see it as the same as a motorway services, really, just one with trains instead of cars. Indeed, medium sized stations could learn a lot from the new Rugby services which has a great ambiance, not dissimilar to a more modern small to medium sized airport.

If you dislike SSP's offering that much, you can always go somewhere else and take food/drink with you.

 

[LNW-GW Joint]

Costa is owned by Coca Cola today (until 2019 was Whitbread).

 

[Starmill]

They're not in monopoly control. If you give Network Rail commercial a ring or search online https://property.networkrail.co.uk/properties you too can lease a food and beverage unit in one of their stations. As long as you can pay for it.

I like the options at Manchester Piccadilly, where Greggs, Coop Food, Moose Coffee, Black Sheep Coffee, Archies, Piccadilly Tap and a handful of others are all available on the station approach, on someone else's (very well sited, for them) commercial property.

 

[markymark2000]

This is the answer right here. NR's obligation is to take the highest possible rent, not install the 'best' possible provider in the eyes of passengers.

It mightn't be the answer you want to hear, but it is the answer.

Yes and no. The best possible rent without enabling forms to rip off the passengers by having monopolies to keep fares artificially high.

We accept that Network Rail has a monopoly on owning stations, we accept that Network Rail has a monopoly in many areas, so I don't know what people on here want Network Rail to do...

a) accept lower leases, in the hope that this will attract some independent places to win bids (even though there's nothing stopping them from bidding as things stand, or for SSP to still bid most)
b) only allow one party to operate a certain proportion of station coffee/sandwich shops, let's say one firm can't operate more than a third? But we know that the idea of spreading train ownership between three ROSCOs didn't drive prices down significantly, it just created an effective cartel. If we care most about the service that passengers get then would this actually make much difference? e.g. the motorway service stations aren't all operated by one firm but they all charge big money at their sites because they know that people have no other option - if you pay £3 for a cup of coffee then people will charge you £3 for a cup of coffee
c) find some new revenue streams to make up for the reduction in leases (given that any Network Rail income essentially comes from the Taxpayers or Passengers, and we don't want either of these to have to pay more just to save people a few pence on a "Cornish" pasty

Owning a station, a piece of national infrastructure and something which is an operational necessity is very different to a few retail units.
As for the price of products, many motorway services have limited choice for bottled food. Often being a WH Smith's who rip people off on the high street, let alone transport hub stores.

The only reason why this isn't spoken about is because passengers are deceived by the many brands. If these stores were all Upper Crust, people would be saying , hang on, this isn't right. This one firm is doing all of the station catering and so all of the prices are inflated and aligned so people are ripped off.

Maybe Grant Shapps will be reading this and his next distraction tactic will be to suggest that "wouldn't it be nice if cafes on train stations were more like Farmers Markets, and you could have locally sourced organic foods with lashings of ginger beer, just like in t'good old days" - that'd generate a lot of favourable coverage from blowhard newspaper columnists and keep his boss's shenanigans off the front page for a news cycle or two!

Behave. You know that isn't what is being said by anyone. What people want is fairer prices. If a farmer's market pays the rent then it's not ideal but as long as it is competing, that's fine.

To give SSP their credit, things aren't perfect and prices can be a little high

A little high? Many items more than double the price of the high street is hardly 'a little high' it's a rip off.

If you dislike SSP's offering that much, you can always go somewhere else and take food/drink with you.

If you dislike how the railways are ran encouraging monopolies which are damaging to passengers experience, don't use the railways. Oh yes because that sounds like it will go down well.

They're not in monopoly control. If you give Network Rail commercial a ring or search online https://property.networkrail.co.uk/properties you too can lease a food and beverage unit in one of their stations. As long as you can pay for it.

I like the options at Manchester Piccadilly, where Greggs, Coop Food, Moose Coffee, Black Sheep Coffee, Archies, Piccadilly Tap and a handful of others are all available on the station approach, on someone else's (very well sited, for them) commercial property.

That Network Rail site often only advertises land or railway arches. Rarely if ever see a unit in the station available. If some of the above comments are correct, they are on long term lease so won't come up but then I ask are people given a chance to bid then or is the SSP contract auto renewed endlessly.

 

[Starmill]

Yes and no. The best possible rent without enabling forms to rip off the passengers by having monopolies to keep fares artificially high.


Owning a station, a piece of national infrastructure and something which is an operational necessity is very different to a few retail units.
As for the price of products, many motorway services have limited choice for bottled food. Often being a WH Smith's who rip people off on the high street, let alone transport hub stores.

The only reason why this isn't spoken about is because passengers are deceived by the many brands. If these stores were all Upper Crust, people would be saying , hang on, this isn't right. This one firm is doing all of the station catering and so all of the prices are inflated and aligned so people are ripped off.


Behave. You know that isn't what is being said by anyone. What people want is fairer prices. If a farmer's market pays the rent then it's not ideal but as long as it is competing, that's fine.


A little high? Many items more than double the price of the high street is hardly 'a little high' it's a rip off.


If you dislike how the railways are ran encouraging monopolies which are damaging to passengers experience, don't use the railways. Oh yes because that sounds like it will go down well.


That Network Rail site often only advertises land or railway arches. Rarely if ever see a unit in the station available. If some of the above comments are correct, they are on long term lease so won't come up but then I ask are people given a chance to bid then or is the SSP contract auto renewed endlessly.

If you're willing to pay more for it you can bid for it.

If you dislike how the railways are ran encouraging monopolies which are damaging to passengers experience, don't use the railways. Oh yes because that sounds like it will go down well.

Railway infrastructure is a natural monopoly, like electricity distribution or street lighting. The minimum efficient scale is bigger than the whole market. It's unclear how this applies to sandwiches and cups of coffee (etc.)

 

[Scott1]

That Network Rail site often only advertises land or railway arches. Rarely if ever see a unit in the station available. If some of the above comments are correct, they are on long term lease so won't come up but then I ask are people given a chance to bid then or is the SSP contract auto renewed endlessly.

Most TOCs handle their own units, or outsource it to Amey TPT.

 

[James H]

I noticed tonight that SSP's Burger King at Waterloo (ex Casey Jones) has closed down

 

[Llandudno]

Some stations like St Pancras have really good outlets, like Boots, Pret and the Sourced Market (expensive but really good quality so worth it)

Others like Leicester have mainly SSP I overpriced crap which I wouldn't touch with a bargepole

Tesco and Sainsburys two minutes walk from Leicester Station plus a plethora of kebab/chicken shops!

 

[Bald Rick]

That Network Rail site often only advertises land or railway arches. Rarely if ever see a unit in the station available. If some of the above comments are correct, they are on long term lease so won't come up but then I ask are people given a chance to bid then or is the SSP contract auto renewed endlessly.

Subject to the terms of the lease, anyone can bid.

The fact that these units on stations are still there suggests that people are more than willing to pay the prices for their products. Those that aren’t go somewhere else. It’s the same principle with central London pubs, for example.

To be clear, it’s not an SSP monopoly. It is the price that the market is willing to pay.

Tesco and Sainsburys two minutes walk from Leicester Station plus a plethora of kebab/chicken shops!

And there’s a magnificent coffee shop just across the road (Merchant of Venice).

 

[johntea]

Leeds and York now have Sainsbury's which are consistently busy

At Leeds unsurprisingly the busiest food outlet is McDonalds, where you can probably buy a meal for about the same cost as a single sausage roll at the SSP outlets! KFC sometimes gets busy but limited seating doesn't help it out much nor does the inflated pricing compared to a normal KFC (I believe it is actually a SSP franchise funnily enough!)

 

[Jamiescott1]

Do ssp still offer the bite card which gives 25% discount at their outlets?

 

[Starmill]

Do ssp still offer the bite card which gives 25% discount at their outlets?

I think you get a 5% discount.

 

[Mcr Warrior]

I think you get a 5% discount.

Believe it's normally a 10% discount. Not sure if they're still available to new users.

 

[Bletchleyite]

Believe it's normally a 10% discount. Not sure if they're still available to new users.

The website is still there but they don't send them out, mine failed ages ago.

 

[185]

LNER is now Gate Gourmet, which has nothing to do with SSP or Rail Gourmet (despite the similar name).

Not entire unconnected...

SSP/Compass has been SSP since 1993, previously called SAS catering... who renamed as Statutory Sick Payrate Select Service Partner.

Both Gategourmet and Railgourmet go back to the same owner, Swissair Catering.

The original ex-BR catering firm OBS became - ERC became - Railgourmet after the Swiss took them over.

After Swissair fell apart... at some point SSP bought Railgourmet.

In 1997, Railgourmet staff had Swissair flight discounts.

 

[pdeaves]

Believe it's normally a 10% discount. Not sure if they're still available to new users.

It was but has now dropped to 5%. So both you and Starmill are correct.

 

[Mcr Warrior]

It was but has now dropped to 5%. So both you and Starmill are correct.

Thanks for clarifying. Even if it were a 50% discount, their product range would, for the most part, still be overpriced and IMHO not particularly good value for money.

 

[cactustwirly]

Tesco and Sainsburys two minutes walk from Leicester Station plus a plethora of kebab/chicken shops!

I know the area well yes, but not so good for coffee.