Price Discrimination: Motorway Service Stations

A recent survey by TravelSupermarket.com discovered that a family of 4 could be paying almost £29 for a basic lunch (sandwich, crisps, a chocolate bar and a drink) at a service station.

A 500ml of bottle water costs £1.27 on average at a motorway service station whereas it is 25p in an Asda supermarket. For a sausage roll it is 40p in Asda and the equivalent costs £2.30 at a service station.

Is this an example of price discrimination or do service stations simply have much higher costs that they have to pass on? Obviously motorway service stations don’t benefit from the economies of scale that supermarkets do, for a start the shop itself is smaller, meaning it has much less shelf space but will have high labour costs. [...]