Waitrose tracks M&S on motorway

With Waitrose set to open stores on the M40 and M25, the battle of the service stations is going upmarket. But there are limits on retailers' scope for growth. James Thompson reports

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.

Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
sportDidier Drogba returns to Chelsea on one-year deal
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
Louis van Gaal would have been impressed with Darren Fletcher’s performance against LA Galaxy during Manchester United’s 7-0 victory
The new dawn heralded by George Osborne has yet to rise
voicesJames Moore: As the Tories rub their hands together, the average voter will be asking why they're not getting a piece of the action
Dejan Lovren celebrates scoring for Southampton although the goal was later credited to Adam Lallana
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Arts and Entertainment
Jo Brand says she's mellowed a lot
tvJo Brand says shows encourage people to laugh at the vulnerable
Life and Style
People may feel that they're procrastinating by watching TV in the evening
ebookA unique anthology of reporting and analysis of a crucial period of history
Rhys Williams
commonwealth games
Isis fighters travel in a vehicle as they take part in a military parade along the streets of Syria's northern Raqqa province
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Life and Style
fashionLatex dresses hit the catwalk to raise awareness for HIV and Aids
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

The benefits of being in Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform