The battle for the pound of car drivers intensified yesterday when Waitrose revealed it is to take on Marks & Spencer by launching the first of its grocery convenience stores in motorway service stations in May. Waitrose has signed a franchise agreement with Welcome Break, the service station operator, to grab a slice of the motorway food market that M&S has in effect made its own since launching the Simply Food store in a Moto site in 2003.
In fact, an improved food offer is just one of the ways that motorway service areas (MSAs) have smartened up their act over recent years. Newer MSAs now offer attractions, including picnic areas with a pond, national budget hotel and coffee shop chains, and wireless access areas. All this is a far cry from 1959 when the first service station opened in the UK at Watford Gap on the M1, which subsequently entered the vernacular for being the point beyond which hard-headed southerners never ventured.
Neil Saunders, a consulting director at the retail consultancy Verdict, said: "Twenty years ago, the average service station was pretty appalling, the service was poor, the products on sale were not good quality and the prices were extortionate." He added: "The improvement has been driven by the service-orientated chains going in there, such as the restaurants KFC and McDonald's, and Marks & Spencer."
Paul Watters, the head of roads policy at the Automobile Association (AA), said the Highways Agency is also considering allowing MSAs to open small conference facilities for businesses to conduct meetings, although a decision is likely to be some time away.
While companies including M&S and WH Smith have identified a lucrative opportunity for having a presence by the motorway, the Government remains committed to preventing MSAs from becoming enlarged retail, restaurant and entertainment complexes with cinemas, although Mr Watters said the drive-in movie areas were considered a decade ago.
In April 2008, the Highways Agency issued a policy document that reaffirmed its commitment to "discourage service areas and other roadside facilities from becoming destinations in their own right". In short, an MSA would become such a destination if people undertook short, or local, trips to the site which would not otherwise be taken. Mr Watters said: "The Government has regulated service areas quite tightly."
The vast majority of motorway service stations in the UK are now owned by three companies, Moto, Welcome Break and RoadChef, as well as the emerging player Extra.
The Highways Agency also prohibits MSAs from building sites bigger than 5,000 sq ft on one side of a road. However, a spokesman for Moto, the operator of 48 MSAs in the UK, said this policy was perfectly sensible. He explained that only a finite number of people visit service stations and that building a "bigger restaurant or a whacking great supermarket would not necessarily bring more money". The spokesman also stated the widely known fact that 75 per cent of people use MSAs just for the toilet.
But irrespective of regulatory or other limitations, Waitrose is keen to park its tanks on M&S's motorway side lawn. Richard Hodgson, the commercial director at Waitrose, which has 199 stores, said: "It is a great opportunity to grow our brand and make it significantly more accessible to people. We fully expect it to be a success."
The first Waitrose shop will open on 1 May at Oxford Services at Junction 8a on the M40, followed by a second on 15 May at South Mimms on Junction 23 of the M25.
Following the trial of the two 2,500sq ft stores, Waitrose will seek to open further shops inside Welcome Break's 24 MSAs, but Mr Hodgson said not all of the service areas would be suitable.
Meanwhile, M&S opens its 28th Simply Food inside an MSA operated by Moto today, but its real growth has come from a separate franchise agreement with BP Connect, which has seen it open 117 stores since 2005.
While M&S is in the throes of offloading about 25 of its Simply Food stores, these do not include its motorway service stations.
Robert Clark, the senior partner at the research firm Retail Knowledge Bank, said: "The motorway service shops at M&S have done pretty well because people travel up and down the motorway to their second homes and cottages, and it is convenient for them to pick up convenience-oriented food than would otherwise be the case."
Waitrose had been talking to Welcome Break around 10 months ago about the franchise agreement. Mr Hodgson said: "In addition to everyday items, such as sandwiches, salads and drinks, customers will be able to carry out a 'top-up' shop on items including bread, milk and ready meals."
Asked about its rival, he said: "We are not gunning for M&S; we are gunning for more customers wherever they come from. It is not just affluent foodies in London – it is about making good, quality food accessible to everyone."
In addition to retailers, Travelodge, the budget hotel operator, and Costa Coffee have made big moves into the motorway service station sector in recent years. While just a few years ago, business executives struggled to get a mobile signal as they were eating a soggy sandwich and poor-quality coffee, they can now connect to the internet, send files to the office, eat a panini and down a latte.
Government regulations and the inherent restrictions of operating alongside the motorway mean that MSAs will always face limitations on their revenue growth, but Waitrose's move signals the potential.
However, there can still be a huge difference between the experience offered by some MSAs on this small island. "It can really be hit and miss – some of the newer ones can be very good and some of the older ones can be awful," said Mr Saunders.