Member Article

On 12 June 2024, the Office of Rail and Road (ORR) published its final report, ‘Railway Station Catering Market Study’. It evaluates the effectiveness of competition in station catering and whether the market is delivering value for money for passengers and taxpayers. 

The ORR has identified barriers to competition, such as limited space and protected leases.  However, the ORR decided not to refer the matter to the Competition and Markets Authority for a market investigation. The main reason for not making a reference is that the ORR considers the CMA may not have the tools to effect meaningful remedies.

In the report the ORR makes five recommendations intended to address the issues:

1. Protected leases: station operators should not grant new protected leases and where possible for existing leases, landlords should contract out of the protected lease provisions of the Landlord and Tenant Act 1954. The ORR will itself make a submission to the Law Commission in the forthcoming consultation concerning this Act.
2. Competitive tendering: station operators should adopt a presumption in favour of competitive tendering of outlets.
3. Consumer and market insights: Network Rail and station operators should better inform themselves of the level of customer satisfaction through more customer surveys and studies.
4. Simplification and standardisation of contracts: Network Rail and station operators should seek to simplify and standardise the contracts between Network Rail, TOCs and catering retailers.
5. Strategic direction: The Department for Transport is encouraged to provide strategic steer on the above points to Network Rail, train operators, infrastructure managers and others.

The measurement of the success of any of the above will be to address an early finding by the ORR that prices paid by customers at stations can be higher than the high-street and customer satisfaction compared unfavourably with the high street equivalent. No doubt it will be interesting to see how Great British Railways, currently working through its Transition Team, take on board such points and whether the DfT will transfer the strategic steer to them to put into practice.

 

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