The price of railway station food and drink is to be investigated by the rail regulator amid reports that passengers are being charged much more than on the high street.
The Office of Rail and Road (ORR) said its intended to “scrutinise the market, its structure and dynamic, and examine if it is working well” after customers had complained that prices for food and beverages sold at stations were often far higher than their high-street counterparts and that they were not satisfied with service in some cases.
Scrutiny is likely to fall on the main players in the railway food retail market, which include Caffè Nero, Pret a Manger, McDonald’s, Costa Coffee, Burger King and SSP, which operates brands including Upper Crust, Camden Food Co and Ritazza. Greggs and WH Smith may also fall under the spotlight.
The investigation comes after a number of reports of rip-off prices at railway stations, including a 2019 investigation by the Mirror newspaper that found that transport outlets including WH Smith, M&S and Greggs were charging up to three times as much for chocolate, sweets and drinks as other branches of the same firms.
A similar report appeared on ITV that year in which the pub chain Wetherspoons and coffee shop Starbucks admitted that they charged more in railway stations because of the higher costs of doing business there.
The ORR’s market study, which has asked for submissions by 7 July, will examine whether there are factors that are “detrimentally affecting the interests of consumers and businesses” such as barriers to entering the market and whether enough companies are operating in stations to ensure that it is a competitive environment.
In a paper outlining the scope of the inquiry, the regulator said: “As consumers across the country are affected by the rising cost of living, we want to ensure that passengers are getting affordable food and beverages when using station facilities. It is important that the railway industry gives customers good value for money and improves their journey experience.”
It said that station catering services were an important part of the experience of travelling by train and an improvement could “make a contribution to getting more passengers on to trains and providing a significant boost to the railways sector”.
A preliminary investigation heard from station operators that they had limited ability to renegotiate lease contracts, or to terminate longstanding tenancies and renew them with more competitive options.
