Why are service stations a rip-off?

An overhead view of the Cobham service area on the M25 motorway. A junction has been built to allow traffic from both sides of the motorway to access the services.Today the transport secretary, Chris Grayling, called for an investigation into what he called “exploitative” fuel prices at motorway service stations, which are typically 20p per litre above prices elsewhere (and the gap between service stations and supermarkets is even bigger). This has been the case for years; most products available at motorway service stations (and stations run by the same companies off motorways) are priced considerably higher than they are elsewhere, except for a few categories of items which are fixed, such as newspapers. Service station operators blame the ‘complexities’ of motorway trading, such as the need for 24-hour staffing. I am surprised, though, that this needs any investigation as the causes of overpricing at service stations are obvious.

To begin with, many motorways have very few services; the older ones like the M1, M4 and M5 have more while newer ones such as the M20 and M25 have far fewer and also long stretches without any. Non-motorway major roads are much better served; on a dual carriageway trunk road, you will pass a large filling station which has toilets, basic food and papers on sale and a few parking spaces with much greater frequency than on a motorway. Prices at these are often higher than at small filling stations but considerably lower than on motorways, and increasingly they do offer 24-hour service though, for truckers, they do not always have a high enough canopy to accommodate a large trailer (the European standard is 4m high, or 13ft 2in, but British trailers can be as high as 5m and are frequently 14 or 15ft high). The difference is that there is competition and stations are bought and built by operators as an investment.

Motorway service stations aren’t like that; they are designed to be one-stop shops for all travellers’ needs with a hotel (usually a Travelodge or similar), a filling station and a building containing a newsagent, various food outlets, toilets, showers and a few other small shops such as a small ‘gaming’ arcade and a mobile phone accessories shop. Increasingly they also have a drive-through café operated by Costa or Starbucks. They are, by intention, few and far between. The M40 has four over an 89-mile distance; when it first opened it had none, and neither did the M20, M26 and M25 that linked it to the Channel ports at Folkestone and Dover. The M25 still has no services on its western side (i.e. in between the A3 and M1), probably because land prices are much higher there than further out, but this is still the busiest stretch which links all the major roads heading south-west, west or north-west. A few years ago one was built at Cobham, just east of the A3 junction, but the place it was most needed was probably between the M4 and M40 junctions. While there is nothing to stop drivers who know of the existence of off-motorway services from diverting to use them (and some sat-navs will show them to the driver), they are almost never signposted, and advertising to motorway drivers is prohibited, supposedly to avoid distraction (though other dual carriageways, where speed limits are the same and the quality of the road often poorer in terms of gradients, curves, the length of slip roads etc, are not covered by this law).

The free parking (for up to two hours) should not be used as an excuse to overcharge. Service stations are a social necessity: driving long distances, especially on tedious and unchanging roads, makes people tired, and people need food and toilet facilities. This is partly a consequence of the ‘closed’ motorway model and this needs to be compensated for rather than used as a means to make extra money. While I am not saying the food should be free, it should be ensured that prices are not higher than they are elsewhere. Concessionary traders should not be paying higher rents than for a shopping-centre or high-street pitch, and operators should not be paying rents that would give rise to the need for excessively high pitch rents that lead to overcharging. The stations could not be built without government intervention as they need slip roads off the motorways and sometimes whole junctions (e.g. Cobham); the government should be intervening to make sure prices are reasonable, and certainly not intervening to drive prices up.

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