SSP Group plc (LSE:SSPG), the operator of food and drink stores in travel locations, is facing pressure from the UK's railway regulator which said the process for acquiring railway catering outlets should be more competitive.
The Office of Rail and Road has previously revealed sites in stations had remained in the same hands for long periods due to how the leases were structured.
Railway station operators were found to have not received enough incentives to push competition among their food outlet locations with leases set to expire.
Now, the regulator's final report has suggested simpler and more standardised contracts should be offered for those newly interested.
More strategic focus and support to railway station operators is believed to be required and SSP has been asked to submit a plan that follows this.
“A push by the Office of Rail and Road to improve competition in the UK railway station catering market is bad news for SSP," said Russ Mould at AJ Bell.
“Selling baguettes and pasties at above-market prices has been lucrative business for SSP given its dominance in the sector.
“Despite a potential shake-up to the market, shares in SSP barely moved on the news. Investors appear to have taken the view that SSP’s expertise and scale won’t be materially challenged, partially because it does business in many geographic territories beyond the UK.
“It’s worth noting that SSP’s share price is already depressed and has been since the onset of Covid, making it one of the few companies not to see its stock bounce back post-pandemic."
Shares in SSP held flat at 162p.