A travel retail shake up is on the menu. Rachel Barnes reports

Marks and Spencer's Simply Food format could be ripe for expansion following the announced sale of catering group Compass's travel arm Select Service Partner.
The £1.82bn sale, still subject to regulatory and shareholder approval, will break up the SSP division. Britain's biggest service station, Moto, is to be acquired by Australian bank Macquarie for a reported £600m, while the food and drink outlets, including M&S's Simply Food franchise, airport and railway formats Whistlestop, Upper Crust and Caffé Ritazza, among a string of other well-known brands, are to be bought for an estimated £1.2bn by EQT, a private equity vehicle owned by the Swedish Wallenberg family.
What lies ahead for the brands could have a huge impact on travel retail, with more than 50% of franchise outlets at the UK's biggest stations and airports owned or run by SSP. The cash bidders will almost certainly be looking to add brands to the portfolio, believe analysts.
EQT and Macquarie are tightlipped about their plans for the outlets, which span 100 railway stations and 44 motorways in the UK, and more than 600 airports and stations across the world in 26 countries.However, EQT senior partner Jan Ståhlberg says: "The company fits with EQT's strategy to invest in companies with substantial growth and development potential. "
SSP chief executive Andrew Lynch, who will transfer to EQT, is equally optimistic. "I'm absolutely delighted that EQT recognises SSP's significant growth potential. Our portfolio of brands will continue to play a key role in SSP's future development."
The buyers certainly believe in continuity as SSP UK MD Tim Moss will become chief executive of Moto. Compass has also secured supply deals for the next five years to all the outlets, in a contract worth an estimated £300m to £400m.
Business as usual is also the message from M&S's head office. Spokeswoman Sue Sadler says: "We're happy with everything and we're now looking forward to working with EQT. We'll continue with the roll out."
Lynch's plans for up to 40 stores in the short term and double that number in the longer term have not changed, she adds. Any further short-term expansion plans are likely to be put on hold while the deal goes through and the new owners take stock, says Cheuvreux analyst Konrad Zomer. "But this would only be short term. Both have enough finances to keep the companies moving on. They didn't buy the brands for restructuring and selling on, so we'll probably see more brands being added to the group."
Other options include the expansion of Simply Food overseas, says Zomer: "If the new owners can build a case for overseas expansion or conversion, then it could well happen," says Zomer.
Although on the face of it Simply Food may appear a more attractive offer than Whistlestop, the latter appears to have been performing ahead of the market. Zomer says: "Compass has never disclosed figures on a brand by brand basis, but I believe Whistlestop's margins have been good in the past few years, especially compared to some of its competitors."
Nick Gladding, senior analyst at Verdict Research, agrees that although the conversion of some Whistlestops to Simply Foods would be looked at, the two could operate side by side for different markets. "There's clearly an opportunity to open more Simply Foods, but there's potential for the two formats to co-exist at more stations. They have different propositions within convenience retail. At places like train stations, people often have time to kill and money to spend. There's a real opportunity for retailers to cash in on this more."
With redevelopment work either already underway or in the pipeline at major train stations and airports across the UK, the growth potential is clearly attractive enough for EQT.
The industry will have to wait to find out whether they decide to leave things happily chugging along or decide to invest in more innovative formats to take food and drink travel retail down a different track.