Motorway "Rip-off" stations...

Meeko

Hi Guys,
This is my first post... I was actually browsing for food poisoning purposes at a Moto Station and this thread come up. I actually work for a Moto service station and it seems that once every 2 weeks I seem to get what I assume is food poisoning. About 10 - 20 mins after I've eaten I start to get severe abdominal pain that is unreal to describe and I was looking at ways to report this. Anyway one of the main reasons Moto prices are so extortiantley high is because we are pretty much governed by the Highways Agency and we are not allowed to be classed as a "destination" such as Tesco's, Asda, ect... It's for traffic calming measures. If the Moto services were to lower all their prices to compete with Tesco and Supermarkets people will be travelling to the Service area as a destination and this would congest all the motorways. Just though I'd enlighten you all with that piece of information .

taxiphil

Meeko wrote: »

Anyway one of the main reasons Moto prices are so extortiantley high is because we are pretty much governed by the Highways Agency and we are not allowed to be classed as a "destination" such as Tesco's, Asda, ect... It's for traffic calming measures. If the Moto services were to lower all their prices to compete with Tesco and Supermarkets people will be travelling to the Service area as a destination and this would congest all the motorways. Just though I'd enlighten you all with that piece of information .

That's amazing. So is there a specific piece of legislation which says motorway service stations must charge high prices? Does it stipulate how much more expensive than supermarkets they must be, e.g. 50%? And if they don't comply do they get prosecuted for selling things too cheaply?

I find it hard to envisage people making a special trip to a service station to do their shopping. Given the nature of motorways, you can't turn round and come home when you drive out of the services - you have to keep driving in the same direction until you get to the next exit, which can be a long way away in some cases.

poodledoodledoo

Although it seems like a good idea to 'treat' yourself to a Burger King meal at the time of pulling into a MSA, it really isn't much of a treat overall.

There are 5 in our family. The average cost of a Burger King meal with a dessert is around £5.50 ish+ each. Just think of the picnic you could afford to make with a budget of £27.50!!!

I like to make an event out of a journey and would MUCH rather spend my cash on a delicious gourmet picnic than a bag of hot, greasy, overpriced, overprocessed junk!

I do enjoy walking around service stations trying to spot the most overpriced item though, or maybe the most sullen staff member

mustrum_ridcully

taxiphil wrote: »

That's amazing. So is there a specific piece of legislation which says motorway service stations must charge high prices? Does it stipulate how much more expensive than supermarkets they must be, e.g. 50%? And if they don't comply do they get prosecuted for selling things too cheaply?

I find it hard to envisage people making a special trip to a service station to do their shopping. Given the nature of motorways, you can't turn round and come home when you drive out of the services - you have to keep driving in the same direction until you get to the next exit, which can be a long way away in some cases.

As I understand it every motorway service area company has to pay the government for the right to run the service area.

Then on top of that they must provide free toilet facilities, it must be open 24hrs, it must provide free short term parking. I imagine that during the night they struggle to cover the costs of running the place.

jd87

I don't think people should get too angry about service station prices. Yes they are too expensive, but in some countries they don't have service stations at all and you can be forced to drive for miles without anwhere suitable to stop. Service stations are expensive because, by law, they have to be open 24 hours, and keeping the places open in the middle of the night when very few people go there costs a lot of money.

taxiphil

I think the argument of higher costs due to 24 hour opening was lost several years ago when Tesco and Asda decided to keep hundreds of their stores open 24 hours - and lo and behold - their prices didn't suddenly shoot through the roof as a result. Oh, and supermarkets also provide toilets and free parking.

uktim29

taxiphil wrote: »

I think the argument of higher costs due to 24 hour opening was lost several years ago when Tesco and Asda decided to keep hundreds of their stores open 24 hours - and lo and behold - their prices didn't suddenly shoot through the roof as a result. Oh, and supermarkets also provide toilets and free parking.

No, it doesn't quiet work like that.

I did work part time during my A levels at a MSA. Supermarkets have a much higher turnover, therefore get through much more stock. Say it takes 50 people to fill a Supermarket it's not that difficult to say get 20 of them to fill overnight allowing to keep the store open and you'd still have 30 in the day. There would be no extra cost. It's just a case of rearranging workload.

MSA'a can have very low turnovers, in fact many of the units for over 50% of the year won't even take £1000 in one day. Sometimes takings might be only £200/£300 pounds. Obviously this is takings not profit. Take the shops for example, they will need very little filling. There is no moving staff to fill overnight because it simply wouldn't take that long to fill up. To achieve 24 hour opening you would need to spend more money.

The same concept will apply to the catering side of the business. They are quiet and don't require 24 hours of work to keep them running so 24 hour opening would cost more. Some MSA's will get busy this time of the year and a few on the M25/M40/M6 will be quiet busy year round but this will often account for less than 10% of any MSA chains MSA's so these will have to off set the other 20 or 30 so very quiet ones.

Whilst I worked in a MSA they were in fact investigated by the office of fair trading into their profits but the result was their profits were perfectly inline with other retail/catering business.

A MSA is not allowed to be a destination but this doesn't effect price, running costs do. I know the above because I had an idea to increase the takings of the shop I worked at. I though about increasing lines to make it similar to the Spar/Tesco Express idea where locals during rush hour could then use the MSA shop rather than their local supermarket for convenience if they drove past one.

The idea was if turnover increased you can lower the margin as high turnover business's can run on slightly lower margins as turnover makes up for that. Then the lower margin would bring prices inline with say a Tesco Express etc. I was told that this would then make the MSA a destination which as mentioned above isn't allowed.

The long and the short of it, yes they cost more but thats the nature of that sort of business. They have much higher overheads and limited room for expansion. Their profit margins are inline with other similar business's in the same industries.

Just an edit to comment on this

taxiphil wrote: »

Given the nature of motorways, you can't turn round and come home when you drive out of the services - you have to keep driving in the same direction until you get to the next exit, which can be a long way away in some cases.

I worked at one located on a junction which around 50% are, so the above argument does not apply. If they were to buy lots of land around and attempt to become 'retail parks' then even ones in between junctions could become destinations if they are not located near a city/large town which might otherwise have a retail park. That could also cause people who otherwise commute on A roads to use the Motorway if that was the case even if it might add a few miles to their journey.

So yes, MSA's are not allowed to be destinations. This does effect price but not dictate it. The effect is the MSA has high overheads and cannot expand it's business to increase turnover therefore allowing prices to lower. This doesn't dictate prices, just causes them to be high. Meekos knowledge of this seems to be similar to his knowledge of food poisoning, more on this below!

mustrum_ridcully

taxiphil wrote: »

I think the argument of higher costs due to 24 hour opening was lost several years ago when Tesco and Asda decided to keep hundreds of their stores open 24 hours - and lo and behold - their prices didn't suddenly shoot through the roof as a result. Oh, and supermarkets also provide toilets and free parking.

Ever noticed what they're doing in the middle of the night in ASDA or Tesco? Re-filling the shelves, they used to do that for a couple of hours after a shop closed and during the day. Chances are they now employ fewer people during the day to stock shelves (and get in peoples way) and have moved them to nights.

Whenever I've been to Tesco in the middle of the night there are always customers around, but I've been to MSAs that are empty apart from staff.

Edit:
The supermarkets ONLY open stores 24hrs that are profitable. I have seen a Tesco go 24hr only to go back to normal hours 3-4 months later because it couldn't pull in enough customers.

uktim29

Meeko wrote: »

I actually work for a Moto service station and it seems that once every 2 weeks I seem to get what I assume is food poisoning. About 10 - 20 mins after I've eaten I start to get severe abdominal pain that is unreal to describe and I was looking at ways to report this.

Most food poisoning takes at least 4 hours from eating before symptoms start, bacteria simply cannot grow that quickly inside you. Symptoms are your bodies way of fighting the bacteria (that happens after it got there), therefore a fair amount would need to be present for you body to do this. Then you would get symptoms, this doesn't happen in 10/20 minutes.

If it's happening 10 - 20 minutes after you've eaten it must be your previous meal. With an average shift being 8 hours long (and a break being 2/4 hours into that shift) I would assume it would be what you cooked yourself/ate for breakfast that must be causing your problems!

taxiphil

Very interesting post, Tim. Everything you say makes sense, but I'm still waiting for someone to explain why this is a uniquely British phenomenon.

Across mainland Europe, service station prices are only slightly higher than their already low supermarket prices, e.g. crisps and chocolate bars are about 10-15% more, when in Britain they're easily more than double the supermarket price (the prices in the new breed of WHSmith stores in service stations and airports are absolutely breathtaking - e.g. 74p for a chocolate bar and 78p for a bag of crisps, etc.).

In Europe, fast food outlets (like Burger King) on motorways don't charge more than their "high street" prices - unlike in Britain where they're about 50% more.

And in France, Germany, Belgium, Holland and Spain the price of a take-away coffee on a motorway is 1 Euro (80p) and has been pegged at that level for some years. It's almost as if it's a psychological barrier that they're scared to break.

Compare that to the cheapest motorway coffee in Britain which is £1.99, and one chain is now charging £2.29 for its cheapest coffee in a paper cup. That's a huge difference which takes some explaining. And the police wonder why drivers are disinclined to stop for a coffee when they're feeling fatigued!

I drove across Norway and Sweden recently, and these countries are renowned for their higher cost of living, but even service station prices over there were slightly cheaper than ours (of course they're even cheaper in "real terms" when you consider that their salaries are much higher than ours, whether they're cleaners or doctors).

I'd be genuinely interested in knowing why the business model Tim describes isn't applicable to our European neighbours.