Welcome Break chief executive Rod McKie has told MCA that the group is already seeing the impact of Brexit on customers’ discretionary spend.
McKie said that while the motorway service station operator continues to see like-for-like sales rising at a rate of 4% to 5%, the past six weeks have seen some drop-off, particularly in weekend trade.
However, he stressed that long-term the impact of Brexit was likely to be positive for Welcome Break as more people choose staycations over foreign travel.
He also told MCA that he was in discussions with restaurant operators about adding further full-service restaurants, following the success of Ed’s Easy Diner at South Mimms service station on the M25 in Hertfordshire.
On Brexit, McKie said: “We are definitely seeing customers being a little more frugal in terms of expenditure. The weeks are still strong but it’s the leisure traveller at the weekend that we think is either consciously or subconsciously holding back a bit. We are fortuitous as we are still growing at 4% to 5% like-for-like. But we have seen that slightly shade off because we were much stronger than six to eight weeks ago.
“Brexit is likely to have played a part in that but there is so much noise and interference. There have been other factors like mini-heatwaves, which have a dramatic bearing. These days, if there’s a sustained hot period people just don’t travel. The true test will be the next six to eight weeks.
“There have been immediate impacts, such as the price of coffee beans and of course we’re constantly talking to our partners about those sorts of external pressures and how we can manage them. At the moment I think everyone is just waiting to see what will happen.
“On the flipside, if there is an increase in staycations that can only be positive for us. We won’t necessarily see the effect of that immediately as people will have pre-arranged plans but I would see that driving more traffic for us.”
On the success of Ed’s, McKie said: “It just shows the cyclical nature of things. Ten years ago we were moving away from full-service, now there’s a demand for it again. We are talking to Ed’s and we’re talking to other operators and we’ll look at the opportunities going forward.”
On alcohol he said: “People staying over at our hotels might want to enjoy a drink with their dinner and we see that at Ed’s. And, of course, we sell alcohol for consumption off the premises through Waitrose. But do I see a place for a pub at a service station – not at all. I think it’s totally the wrong environment and I think Wetherspoon’s have found that out.”
