Train passengers buying food at stations hit by 10% price premium – regulator

Train passengers buying refreshments at railway stations are being charged an average 10% premium compared with high street prices, according to a regulator.

An investigation by the Office of Rail and Road (ORR) found that the lack of competition for the sale of food and drink at stations may contribute to higher prices.

It stated in a report that many outlets “stay in the same hands for extended periods”.

This is due to a combination of reasons, such as some retailers’ leases being protected meaning they are generally renewed, limited space, set-up costs and uncertainty from industrial action.

Nearly half (47%) of stations that offer catering have just one outlet, the ORR said.

In addition to higher prices, the absence of competition may also result in station operators receiving less rent, which increases the amount of taxpayer-funded subsidies they need, the report added.

The investigation found that the price premium for station refreshments “can vary considerably by retailer”, with the average “in the region of 10%”.

The regulator did not reveal figures for individual companies.

A mystery shopping exercise suggested retail prices in stations are lower than those at motorway service areas and airports.

ORR director for economics, finance and markets Will Godfrey said: “The railway station catering market isn’t working as effectively as it should be. More competition between companies to operate at stations would bring real benefits to passengers and taxpayers.

“Because money earned from leases at stations ultimately makes its way back to those who operate railway stations and infrastructure, this is money that could be invested in improving services for passengers or reducing the need for taxpayer support.

“We will now work with the industry on the best way forward and will make recommendations on how the market needs to change, with the ultimate goal of improving value and outcomes for customers and funders of the railway.”

The next stage of the ORR’s investigation will focus on what recommendations should be made to the Government, station operators and other stakeholders to enhance how the station catering market functions.

On Monday, the regulator found that many online train ticket retailers are using so-called drip pricing with booking fees of up to £6.45 per transaction.