Perspectives from ISB

A bank holiday visit to a UK motorway service station is usually a grim necessity. It often involves a nondescript atrium surrounded by burger concessions, coffee shops and gambling machines, all charging high prices to a captive audience.

But one idiosyncratic British operator is trying to turn a forced stop into a pleasure. From the freshly butchered beef sausages served in the restaurant to the duck pond outside, Westmorland is a new kind of motorway stop.

Ms Sarah Dunning, 47, is the daughter of the company’s founders and gave up a career in the City to lead the business in 2005. In 2014, she doubled the number of outlets by opening a second station on the M5 near Gloucester, south-west England. It was a big risk: the company had to borrow heavily to finance it and try to replicate the Tebay original hundreds of miles away.

Today that risk looks like it is starting to pay off. Turnover is almost £100m annually, up from £40m in 2013. Staffing has more than doubled to 1,100 people.

Taking risks is what second-generation family businesses must do to survive, says Ms Dunning: “It’s a natural instinct to want to create something of your own.”

There are trade-offs between maximising profit and quality. “We’re not as mercenary as some,” Ms Dunning says. Tables are spaced further apart and public areas more spacious than is typical, which means fewer customers can be accommodated. The company says it pays its staff more than the statutory National Living Wage (from April, £7.83 an hour for over 25s), which raises costs. Prices are high, but Ms Dunning says they match those of many other service stations.

The group serves 10m customers a year. Motorway traffic is edging up slowly and Ms Dunning describes sales as “steady”.

Ms Dunning decided the business was getting too big to manage, so in April 2017 she moved to chair and recruited an experienced chief executive. Rob Swyer was retail director at Asda, a grocery chain, but lived locally. He has focused on the workforce with an in-house business academy and apprenticeship programme. A full family board meeting was convened for the appointment: “We had gone from being a local business to a national one — it was a straightforward decision,” says Ms Dunning.

Brexit, says Ms Dunning, is the next challenge: “The focus on local producers and farmers should stand us in good stead. We think more people will holiday in the UK. We just hope they have the confidence to spend.”

“But part of the strength of this business is that it’s been doing this before it was fashionable. We were doing it because it was the obvious thing to do, rather than because we were just following the interests of the market.”

Source: Bounds, Andrew, April 3, 2018;