If music be the food of love, play on!
I have attended a couple of events and hosted one in the last two weeks that all touched on or covered in detail the role of food and beverage (F&B) in the places we traditionally shopped. The growth of F&B has been everywhere not just in the traditional high street. Shopping centres and retail/leisure parks all have expanded the opportunity for us to eat, drink and be merry in the hope we might shop as well.
Food first appeared in shopping centres 25 years ago but it is only recently with the new schemes that the impact has been noticeable. LDC analysis (by unit) shows great variance in the provision of F&B in shopping centres. At one extreme we have Trinity Leeds and Union Square Aberdeen on 35% and 31% respectively whilst the Rochdale Exchange and Newlands Kettering are just 2%.
F&B is not just F&B anymore either. You are either casual/fast casual (e.g. Pizza Express), quick service (e.g. McDonalds), coffee & relax (e.g. Starbucks) or treats (e.g. Millies Cookies)! Research by BCSC shows that 75% of 18-24 year olds had eaten out in the past two weeks and 67% of all age groups questioned. Food is big business and is responding accordingly. In 2011 3m sq.ft. (source BCSC) of F&B floorspace was added and branded restaurants are expected to have sales of £22bn by 2018 from £16bn in 2013.
For many the perception is that F&B is the saviour for all our empty shops (over 50,000 of them) but this is not the case as retail rents are still 21% higher than F&B rents (source BCSC) and so whilst you need them as a landlord they will not, as yet, give you the same financial rewards unless of course their presence means more sales for your retailers and increased demand for that retail space. So the redundant space we have out there (20%+?) will not be taken up by F&B.
The new trend is ‘street food’ and this is a very interesting and popular concept as it is essentially Mr Whippy on fire! Be definition they tend to be mobile, entrepreneurial and have large followings. They can therefore come and go as they please and their fans will follow. So whilst they could create a great opportunity for a permanent unit based on a proven mobile street food concept they also have the potential to create alternative magnets for potential shoppers away from traditional shopping centres. The most interesting element if you are a retail park landlord is that these dynamic, hip and popular food hubs can act as burstable F&B capacity at peak times such as weekends and bank holidays. Allocate 10-20 car parking spaces and your have a bespoke and cool F&B hub. Trinity Leeds is the first shopping centre to adopt this inside where they have five new street food traders every month. Variety is the spice of life!
I believe these formats will become increasingly significant and will be an interesting challenge for the old world of property and leases to the new world of ‘give it a go’, provenance and theatre. Exciting times and LDC will be keeping its clients informed on who, what and where this is happening and to what effect.