The pits of the pit stops?

09 July 2004
The pits of the pit stops?

Nearly 300 million people visit Britain's motorway service areas (MSAs) every year, but fewer than a third spend more than a penny. The majority nip to the toilet and drive off again.

According to the latest pan-European survey, the majority of visitors are right not to dawdle because UK service stations haven't improved in the last two years and offer poor quality food at high prices. The survey was carried out by Swiss hotel inspectors and funded by European motoring organisations, including the AA Motoring Trust. It garnered lurid headlines such as "The Roadside Caf‚ from Hell".

UK motorway service operators are used to getting a rough ride from the media and the AA. Tim Moss, managing director of Moto, even claims the AA has never supported British MSA operators. "It's like asking a vegetarian to choose his favourite ham sandwich," he says.

However, a closer look at the survey shows the UK got good ratings for road safety, car parking, family-friendliness, choice of goods in the shop, and friendliness of staff. Moto's Cardiff West site came second for cleanliness and hygiene out of the 62 sites inspected in 10 countries.

Still, the survey put the UK at the bottom of the league table for quality of food and value for money. The price of a standard meal in the UK was twice what it cost in Italy and Germany. Moss says: "It's abundantly clear that cultural differences have weighted these scores against the UK. For example, an "eat as much as you like" salad bar in the UK is compared with a side salad in Slovenia."

As further defence against the accusation of high prices, UK operators point out that they have much higher operating costs than their European counterparts, which are passed on to the paying customer. It costs about £30m to build an MSA. The operator, usually in partnership with a petrol company, meets the costs of buying and building the whole site, including slip roads and parking areas.

In Germany, where inspectors found the best MSA, the situation is different. The government pays for slip roads and car and lorry parks. A holding company usually owns the building, and the operator simply runs it.

MSAs are subject to regulations which haven't changed since the 1950s when consumer choice was limited and traffic levels low. These outdated regulations limit the size of the retail space and what's on sale.

Licensing reform has not included MSAs. Last year's Licensing Bill continues to prohibit the sale of alcohol anywhere on the motorway. This means that guests staying at a roadside motel can't have a glass of wine or beer with their evening meal. So what do they do? Jump in the car and drive to a nearby pub or restaurant. "I'd have thought that's actually a rather dangerous state of affairs from a road safety point of view," says Martin Grant, who replaced John Greenwood as chief executive of RoadChef in April as part of a management shake-up. He objects to the inconsistency of the law that allows places clearly reachable only by car, including Little Chef restaurants on major A roads, to serve alcohol.

The Government's hardline message that alcohol and motorways don't mix starts to look more like another example of our licensing laws preventing individuals from taking responsibility for their own actions. Many MSAs on the Continent stock a large range of wines, spirits, and groceries often characteristic of the local region. Moss would like to be able to sell alcohol from Moto's Marks & Spencer Simply Food franchises, but he can't.

The British Hospitality Association has an MSA operators committee, which is lobbying the Government to lift such restrictions, but no progress has been made. Operators have to prove to the Highways Agency that their sites won't become destinations in their own right which generate extra traffic.

Of course, none of the above explains poor quality food or service. This is down solely to bad management, poor supervision, and a lack of training and motivation. All three operators claim to have invested millions in improving their facilities and levels of service over the last three years.

But according to Rod McKie, who joined Welcome Break as chief operating officer two-and-a-half years ago, the prevailing culture of motorway services has been insular and institutionalised. After holding senior positions at TGI Friday's, Pret A Manger, and Coffee Republic, McKie was head-hunted to take up the challenge of modernising Welcome Break, a business with annual sales of £560m.

Welcome Break hasn't had it easy recently. Owner Investcorp was forced to stave off a financial crisis by buying out disgruntled bondholders last month. The crisis had been brewing since 1997, when Investcorp paid what many analysts felt was about £100m too much for Welcome Break, and its profit had stayed static at £40m for the last three years.

When McKie joined, it was the first time in his career that he'd met employees who had worked for the same company all their lives. Since he joined, 50% of management have left, retired or been sacked. McKie says: "Faced with the challenges of the modern world, some were found wanting. We have a very dedicated and motivated workforce now."

McKie inherited a centrally-run business and has now given individual site managers greater responsibility. There are performance reviews every quarter which focus on a particular area - raising margin, labour productivity or speed of service. Managers get bonuses or prizes, including Rolex watches and MG sports cars, for meeting targets.

McKie is particularly hot on quick service and started a "get caught speeding" campaign that gives employees who consistently serve customers in less than 90 seconds a £50 "speeding ticket" gift. The staff at the site with the best score won a trip to the Disney School of People Management in Florida.

MSAs are subject to huge peaks and troughs, with a six-coach party of football supporters one day, and a trickle of visitors the next. Welcome Break staff used to work set shifts. McKie introduced an automated labour scheduling system that records transactions per hour. It has helped managers arrange working hours more efficiently. Opening times of Welcome Break's outlets are no longer set in stone but depend on trading patterns.

McKie says that the changes he has made are beginning to pay off. Welcome Break's profit is forecast to rise by 23% in its current financial year (from 1 September 2003).

With only two or three new MSAs getting the go-ahead in the coming years, the goal of all operators will be chasing the custom of those 70% of visitors who still spend nothing at all. The key will be well trained, well paid and well motivated staff.

But in order to meet modern expectations of customer service, operators deserve to have archaic and indiscriminate restrictions over their businesses lifted. Once that happens, maybe the next pan-European survey will be a truly like-for-like comparison. n

On the Road

Sites: 48
Owner: Compass Group
Franchises: Burger King, Harry Ramsden's, Marks & Spencer Simply Food
Own brands: Upper Crust, CaffŠ Ritazza
Number of staff: 6,000

Welcome Break
Sites: 24
Owner: Venture capitalist Investcorp
Franchises: Burger King, KFC, Days Inn hotels.
Own brands: Coffee Primo, Food Connection
Number of staff: 4,500
Turnover: £560m including fuel; £190m not including fuel

Sites: 21
Owner: Japanese investment bank Nikko
Franchises: Wimpy, Costa Coffee, Travel Inn, Spar
Own brands: On Route
Turnover: £300m including fuel

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