ORR calls for more competition in station catering

[physics34]

That essentially sums up rail privatisation almost in it’s entirety

Privatisation can work if regulated properly.... alas, it hasnt been.

 

[Djgr]

Privatisation can work if regulated properly.... alas, it hasnt been.

Of course the UK is littered with ones that haven't. Water and utilities are both good counter-examples.

 

[physics34]

Of course the UK is littered with ones that haven't. Water and utilities are both good counter-examples.

Exactly. Poorly regulated. Profits before service. There is an argument that rail privatisation has actually had a few positives, ie Safety... eventually (after Ladbroke Grove).

 

[Haywain]

There is an argument that rail privatisation has actually had a few positives, ie

Massive growth in passenger numbers and revenue.

 

[Djgr]

Massive growth in passenger numbers and revenue.

although little proof that this was down to privatisation.

Interesting to compare rail passenger growth in Great Britain over the past decade with rail passenger growth in state owned Northern Ireland railways.

Very similar trends

 

[Haywain]

although little proof that this was down to privatisation.

And no proof at all that is wasn't. Whether a public owned BR would have had the same incentives to drive growth that the TOCs had is something we will never know.

 

[Class 170101]

Surely the ORR needed to look at the operations of these franchises in terms of opening hours etc? Wasn't that issue raised by a certain 'Railway' Lord when in post 15/20 years ago?

 

[Djgr]

And no proof at all that is wasn't. Whether a public owned BR would have had the same incentives to drive growth that the TOCs had is something we will never know.

When I have more time I will look at growth in rail passengers for the two railway operators on the island of Ireland.

But my gut feel is that the growth trend in Great Britain is no different to them.

And therefore not an obvious benefit from privatisation to make up for today's railway anarchy.

 

[yorksrob]

And no proof at all that is wasn't. Whether a public owned BR would have had the same incentives to drive growth that the TOCs had is something we will never know.

Not really much point in citing it in that case. We have a quasi-privatised, quasi-nationalised system at the moment, however bad policy and poor quality government are the defining factors in the state of the service.

 

[Djgr]

Not really much point in citing it in that case. We have a quasi-privatised, quasi-nationalised system at the moment, however bad policy and poor quality government are the defining factors in the state of the service.

And to return the thread, it is difficult to see the benefits of privatisation for station catering but what we can see is that what we have today is not very impressive.

 

[Haywain]

And to return the thread, it is difficult to see the benefits of privatisation for station catering but what we can see is that what we have today is not very impressive.

At major stations, privatisation is a red herring because the stations are owned, operated and managed by the publicly owned Network Rail.

 

[Djgr]

At major stations, privatisation is a red herring because the stations are owned, operated and managed by the publicly owned Network Rail.

Not a red herring because the provider of the vast majority of catering is essentially a privatised monopoly.

As such they are likely to operate in a different way to a publicly owned monopoly, which is what Travellers Fare was.

It is not at all clear whether a 2024 version of Travellers Fare would have been better than what we have now. But what we have now is not great.

 

[Rescars]

For an interesting take on what might have been, see "Sauce Supreme - the Annihilation of British Transport Hotels" by P.A.Land, if you can find a copy.

 

[Bletchleyite]

Massive growth in passenger numbers and revenue.

An interesting question is whether that would have been better or worse had BR continued but received the much greater funding the privatised railway did. I suspect it would, properly funded, have been the best nationalised railway in the world by a longshot.

Indeed, I think that deserves its own thread, give me a sec...

Alternative reality: what would BR have been like now if we hadn't privatised?

Coming from this thread on catering: https://www.railforums.co.uk/threads/orr-calls-for-more-competition-in-station-catering.259227/page-5#post-6809239 ...it was mentioned that privatisation had seen massive revenue and passenger growth. So an alternative reality - had BR continued, but been...

www.railforums.co.uk

 

[Recessio]

The Final Report has been published 12th June

ORR have found that prices tend to about 10% than in High Street (but varies by retailer)

24% of station leases are under old 1954 legislation where normally just rolls over, and not open to new entrants

Not going to refer to CMA (competition and markets Authority), but going to consider stronger regulatory directions

Have got RDG (rail delivery group) to create working group SSG (station strategy group) to focus on it.

Would like to see more competitiveness in issuing of catering leases

92 pages (and haven't been through it all), so difficult to quote snippets

https://www.directorstalkinterviews.com/wp-content/uploads/2024/06/railway-station-catering-market-study-final-report-june-2024.pdf

Thank you for updating us with the report.

Interesting that it wasn't referred to the CMA. Will be interested to see how this pans out in the future and if the SSG has any effect.

 

[yorksrob]

It would be nice to see more independent outlets. Huddersfield station buffet is a particular loss IMO.

 

[Haywain]

It would be nice to see more independent outlets. Huddersfield station buffet is a particular loss IMO.

Independent outlets have a much higher risk of closing because the proprietors decide to quit though, as your example illustrates (if memory serves).

 

[Dr Hoo]

Independent outlets have a much higher risk of closing because the proprietors decide to quit though, as your example illustrates (if memory serves).

A very real issue; recent trips have seen me go hungry and thirsty at Selby and Machynlleth, as well as at Worksop where I think the nice little cafe was ‘closed on Mondays’.

 

[yorksrob]

Independent outlets have a much higher risk of closing because the proprietors decide to quit though, as your example illustrates (if memory serves).

A very real issue; recent trips have seen me go hungry and thirsty at Selby and Machynlleth, as well as at Worksop where I think the nice little cafe was ‘closed on Mondays’.

A lot of businesses have had to adopt funny hours due to costs and not just on the railway.

The only long term solution is for the country to become less dependant on unstable foreign powers for food and energy so that inflationary shocks are less pronounced.

 

[Haywain]

A lot of businesses have had to adopt funny hours due to costs and not just on the railway.

The point being made is that owner operated outlets will do this because the owner operator wants time off, rather than working 7 days a week. That isn't about costs, it's about having a life.

 

[Deepgreen]

Privatisation can work if regulated properly.... alas, it hasnt been.

Not where there is no genuine profit, or competition at point of use, it can't.

 

[Pugwash]

Massive growth in passenger numbers and revenue.

But Subsidy has gone up incredibly, something does not add up here, there is passenger and government money leaking out everywhere from what is public transport.

 

[Topological]

The point being made is that owner operated outlets will do this because the owner operator wants time off, rather than working 7 days a week. That isn't about costs, it's about having a life.

Yes

Though on paper the fact that a major franchise operator needs staff from 05:00-23:00 each day (not to mention service and clean up time) is the same as the independent needing the same.

However, Starbucks can supply the coffee and cakes with instructions anyone can follow to convert to the final product because they have the infrastructure. An independent would not have that opportunity so needs to ensure service at all times. There are many other examples where the economies of scale help the big chains to provide at anti-social hours (Not saying pub chains use microwaves).

I much prefer to support local business, but can definitely see why stations are better served by the chains.

If there was a structure whereby local operators could use a shared area within the station on a rota that would cover all service times. However, that may not be so easy to implement and requires more physical space within the station than a single franchised operation.

 

[yorksrob]

Yes

Though on paper the fact that a major franchise operator needs staff from 05:00-23:00 each day (not to mention service and clean up time) is the same as the independent needing the same.

However, Starbucks can supply the coffee and cakes with instructions anyone can follow to convert to the final product because they have the infrastructure. An independent would not have that opportunity so needs to ensure service at all times. There are many other examples where the economies of scale help the big chains to provide at anti-social hours (Not saying pub chains use microwaves).

I much prefer to support local business, but can definitely see why stations are better served by the chains.

If there was a structure whereby local operators could use a shared area within the station on a rota that would cover all service times. However, that may not be so easy to implement and requires more physical space within the station than a single franchised operation.

Starbucks can also charge exhorbitant Starbucks prices.

To be fair, on a big station, there's room for both, but if you don't fancy paying three quid for a coffee, an independent is better.

 

[Haywain]

Starbucks can also charge exhorbitant Starbucks prices.

To be fair, on a big station, there's room for both, but if you don't fancy paying three quid for a coffee, an independent is better.

I don't see any significant difference in coffee prices, no matter who is selling the stuff.

 

[Dr Hoo]

I don't see any significant difference in coffee prices, no matter who is selling the stuff.

Definitely, plenty of independents, both on and off stations, charge well north of £3.00 for a proper coffee (not instant). I I’m not just talking about London and the South East either.

 

[yorksrob]

I don't see any significant difference in coffee prices, no matter who is selling the stuff.

I'm guessing you never visited Huddersfield station buffet then !

== Doublepost prevention - post automatically merged: 14 Jun 2024 ==

Definitely, plenty of independents, both on and off stations, charge well north of £3.00 for a proper coffee (not instant). I I’m not just talking about London and the South East either.

I regard instant as a "proper" coffee.

 

[Topological]

I'm guessing you never visited Huddersfield station buffet then !

== Doublepost prevention - post automatically merged: 14 Jun 2024 ==



I regard instant as a "proper" coffee.

In that case you are right. The owner does not need quality control on checking whether a pre-defined amount of instant coffee is having the correct amount of boiling water added.

However, most of us do see a distinction between the coffee which requires grinding and high pressure brewing as proper. There is a little more to it than adding water and I could see that an independent would want more control over the process than Starbucks need with their system.

However, I was thinking more of the other elements where servers are important to quality control. Starbucks clearly don't bake on premises (for example) and therefore are not worried who handles the cake in store (I am being careful in case practices have changed at Starbucks, but there may have been a past system that didn't require much processing at the outlet end).

 

[yorksrob]

In that case you are right. The owner does not need quality control on checking whether a pre-defined amount of instant coffee is having the correct amount of boiling water added.

However, most of us do see a distinction between the coffee which requires grinding and high pressure brewing as proper. There is a little more to it than adding water and I could see that an independent would want more control over the process than Starbucks need with their system.

However, I was thinking more of the other elements where servers are important to quality control. Starbucks clearly don't bake on premises (for example) and therefore are not worried who handles the cake in store (I am being careful in case practices have changed at Starbucks, but there may have been a past system that didn't require much processing at the outlet end).

I think that Starbucks would be fine if they offered a choice between their high quality £3 fare and a £1 cup of insta - but I've not noticed them offer this so far.

 

[Topological]

I think that Starbucks would be fine if they offered a choice between their high quality £3 fare and a £1 cup of insta - but I've not noticed them offer this so far.

Fair play to any shop offering a £1 instant.

The following graphic from the Financial Times may help explain pricing a little better though:

I doubt an independent would get much change from that 88p irrespective of savings on any of the other elements.