David Cameron has announced an investment of £9.4 billion in the rail industry in a project which is “absolutely key to securing our country’s prosperity in the decades ahead” according to the transport secretary, Justine Greening. What neither Cameron nor Greening mentioned was that the money was coming mostly from passengers. The projects are being part funded by above-inflation fare rises, which were announced in 2010.
The new investment package is expected to deliver faster journey times, more reliable services and capacity for 140,000 extra daily commutes by train. And do you know what these extra commuters will do? They will pay an ever-increasing amount of money for the privilege of travelling to work on a train.
I am one of them. The number of us is increasing in the same positive direction as our costs.
First is the price of the ticket. The increase of RPI + 3% each year for three years was announced in 2010. Discounts on season tickets had stopped in 2009* with the arrival of the hardest moments of the recession.
A return ticket to Cheltenham Spa from Bristol Temple Meads went up from £11 to £15 in two years which represents £1000 extra a year.
Second is the cost of the shops and food outlets at the stations. Most of these places have exclusive access to passenger footfall and are in a very privileged position. Instead of reducing prices to reflect the fact that they have a constant stream of customers, they take advantage and charge over and above what what you would find in the nearest stores.
At Bristol Temple Meads there are six convenience food stores within the station and one outside the ticket barriers. The six inside include Starbucks and Pumpkin. A coffee** and a muffin from Starbucks cost £3.30 plus £1.85 respectively. This is nearly £350 more a year than if you were buying them from the Starbucks located in the business park outside the rear entrance of the station (£2.25 and £1.55). Buy outside and you are saving one third of the cost.
Why the extra levy on each customer? Because the Starbucks in the station is run by Select Service Partners who according to Dominic Walsh from the Times, are doing exceedingly well. No surprise there.
Select Service Partners do not have the right to use Starbucks cards – which offer discounts – and they charge ‘eat in’ prices rather than ‘take out’ equivalents. It’s not a scam but it is a premium for every customer commuter that passes its doors and can’t see the difference behind the logo. In Bristol they also run the Bristol International Airport Starbucks which also doesn’t accept the corporate cards.
According to an SSP spokesperson, ‘operating a food service brand at a rail station is not comparable to operating that same brand at a high street or business park location. Rent structures differ, opening hours and days are significantly longer, trading peaks and trough are much more pronounced, more staff are required to serve at peak periods in a commuter environment, and there are a number of logistical challenges (such as operating in a smaller space, with limited areas for deliveries or within the confines of historically important buildings) that all result in high costs.
‘Unfortunately we are not able to integrate with the Starbucks loyalty
scheme however we do operate our own loyalty programme called the Bite Card, which offers our customers generous discounts. At Bristol Temple Meads, this can be used at the bar, the Pasty Shop, Upper Crust and Pumpkin.’
Pumpkin Cafes are ubiquitous throughout British railway stations and their prices are as painful to pockets as Starbucks. Overpriced items can also be found on the trolley service on certain trains and the catering carriage on others. Some prices which may seem familiar to you.
- 69p for an orange (Pumpkin at Cheltenham Spa)
- 1.85 for a fresh banana muffin (occasionally very tasty and fresh)
- Sandwiches, pasties, pastry slices and sausage rolls are all exclusively Ginsters when not sold fresh (Cheltenham Spa)
- Sandwiches range from £2.49 to 2.99, deep fill £3.39
From the trolley service on the Cross Country trains
- £1.70 for 500ml drinks inc water
- £1.20 Capri
- £1.90 orange juice 330ml
- £1.50 for a Starbucks caramel waffle
- £2.10 for a Starbucks via instant coffee
The money paid to these outlets does not go to the government coffers directly, obviously, but the indirect flow is from us to them. So when you hear David Cameron talk about the biggest investment in rail infrastructure for the last 150 years, I hope you know who to thank. Hint: it’s not the government.
Select Service Partners have yet to respond to a request for comment.
*Season tickets stopped being discounted on my service from December 2009.
** Grande soy caramel latte with an extra shot (and wet).
Updated with SSP comment: 23.07.12