The increasing presence of food and beverage (F&B) options in shopping centres – often accounting for more than 20 percent of units in new and redeveloped schemes in more mature markets – is being driven by rapid global growth in consumer spending on eating out, according to a new report from Cushman & Wakefield.
With spending on eating out expected to continue growing over the next 10 years, and consumers’ desire to enhance a shopping trip with social and leisure experiences, a compelling F&B offer is now critical to the success of any retail scheme, the report states.
All four global regions examined in the report are forecast to experience growth in F&B expenditure, led by Asia Pacific and the Middle East and Africa. Based on data from Oxford Economics, consumer spending is forecast to nearly double in the latter (US$182.5 billion to US$363.5 billion) and more than double in the former (US$1,052 billion to US$2,296 billion). As such, F&B spend is forecast to grow at an annual average of 7.4 percent up to 2026 in both regions.
Europe and the Americas, as more mature markets, are not expected to see the same increases in consumer spending but are nonetheless expected to experience healthy F&B annual spending growth of 4.9 percent and 5.5 percent respectively.
As spending increases, customer expectation does too. Once-ubiquitous food courts, made up of common seating areas surrounded by fast food outlets, are a dying breed. While mainstream brands – with ability to pay higher rents – still dominate, landlords are recognising the importance of diversity and other concepts, such as the food hall, have evolved, while there is also a move towards creating different zones within shopping centres.
However, Cushman & Wakefield believes there is latent demand for more non-mainstream international food hall market place concepts, which combine restaurants with food and beverage counters and bakeries, along with the sale of cooking-related products and even cookery schools to add ‘edutainment’. Currently, only a handful of truly international players offer such a format and there is scope for more high-quality operators to emerge and enter new markets.
Darren Yates, Head of EMEA Retail Research & Insight, Cushman & Wakefield, said: “The link between shopping and eating is stronger than ever and is evident in the significant growth in F&B outlets in recent years, particularly in shopping centres. We see this trend continuing for the foreseeable future, given that a high-quality F&B offer is now critical to the success of major retail destinations. An increasing number of locations are now incorporating formats which combine the experience of eating and buying food and entertainment, which taps into consumers’ growing interest in food culture.
“While the short to medium-term outlook for the F&B sector is positive, strong recent growth in the sector means competition in some of the more mature markets such as the USA and the UK is intensifying. As a result, weaker operators may struggle if economic growth begins to moderate and consumers rein back on discretionary spending.”
Anna Hofman, Associate, Retail Agency, Cushman & Wakefield, said: “Changes in lifestyle and leisure activities and rising consumer expectations are behind the growth of the F&B and entertainment sector. Consumers are becoming increasingly interested in going out to explore new venues and foods. This indicates a growth opportunity for both mainstream international chains and small-scale operators to enter the market with a unique offer to cater for local tastes.
“F&B options have recently expanded in Poland’s shopping centres, which have been redeveloped to meet changing consumer expectations. They may account for up to 20 percent of all units in retail schemes that want to ensure a diverse offer of cafés and restaurants. With consumers ever more focused on quality and how products are served or presented, a strong variety of cuisines, formats and prices will help attract more target customers.
“The F&B sector is also expanding in high streets in Poland’s largest cities. New restaurants, pubs and cafés with outdoor seating areas have become popular leisure destinations replacing retail stores in central locations. Dedicated F&B concepts are also emerging, including food halls such as Hala Koszyki in Warsaw. Growing consumer spending on eating out is driving the F&B sector’s turnover and growth. Operators are looking for locations offering suitable exposure, footfall and neighbourhood. In response to growing expectations of inhabitants, city authorities are becoming increasingly engaged in developing public spaces. The outlook for Poland’s F&B sector is very positive and we expect this market segment to maintain a strong growth momentum in upcoming years.”