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Adding value to retail shopping venues through foodservice.

Successful shopping venues are no longer solely defined by the strength of the retail offer available to consumers – an integrated foodservice offer (often referred to as F&B) has now become a key value driver and an increasingly important component of the venue’s overall ‘brand proposition’.

There are several reasons that underpin this trend, including the surge in private equity investment in fast-growth foodservice operators and the subsequent fast-tracked roll-out of new outlets, the relative immunity of foodservice from the growth of online shopping, and also the rise of leisure activities and eating out as an increasingly essential part of any shopping or leisure trip for consumers.

Strong foodservice increases dwell-time and leads to higher retail spend

Given these changes, it is perhaps no surprise that in the last 10 years, foodservice operators have doubled the amount of floorspace they occupy within shopping centres worldwide from 7% to 15%. But what is most interesting is that figures also show that customers who eat during a shopping centre trip dwell on average 27 minutes longer in the shopping centre and spend 18% more per visit (source:

Despite this, the penetration of leading foodservice operators remains highly polarised. In the UK, for example, 16% of the multiple offer nationwide (as measured by Javelin Group’s VENUESCORE retail venue ranking tool) is classified as Foodservice. However, this ranges widely, from lows of only 8% in Northern Ireland and 12% in Scotland to a high of 25% in Greater London. Variation also exists by Location Grade with Foodservice accounting for 21% of the multiple offer in Major City shopping venues but falling away quickly in smaller venues. This dynamic provides an opportunity for growth in foodservice provision in selected locations.

It is also possible to see (via VENUESCORE) that the presence of a strong foodservice offer appears to encourage more fashion retailers to be present and can also lead to more aspirational brands being attracted to a location. Perhaps most telling is actual retailer sales data (as analysed in Javelin Group’s SHOPSCORE sales productivity benchmarking exercise) which demonstrates that a strong foodservice offer generally correlates strongly with above-average retailer sales productivity levels and above-average rental values.

Implications for shopping centre developers and owners

To exploit the benefits that foodservice can bring, shopping centre developers and owners need to think carefully about the tenant mix strategy of their assets, using foodservice to differentiate and underpin the wider brand proposition.

The majority of large shopping centres have embraced the role of foodservice, offering a huge variety of operators to choose from, with more and more centres, such as Trinity Leeds and One New Change on London’s Cheapside, now making foodservice a centrepiece of the overall commercial offer.

This sector provides a critical bridge between retail and hard leisure which allows venues to extend their realistic trading period – keeping the commercial offer relevant to the consumer across a wider time period during the day and across the week.

Tourist destinations such as Covent Garden, locations with high office populations such as Docklands, and city centres such as Manchester and Leeds are locations with very strong foodservice offers. Whilst these are among the more obvious retail location types for a substantial foodservice offer to flourish, there are plenty of other lower profile locations that are (or could be) foodservice havens (see VENUESCORE for more details).

Implications for retailers, foodservice operators and landlords

At a time when retailers and foodservice operators are being more selective about where to open, close and retain stores, it has become increasingly important for shopping venues to develop and demonstrate strong points of differentiation. Data-led strategic decisions can help guide how best to deliver this differentiation.

Foodservice, together with market positioning, effective space masterplanning, environmental design and wayfinding, market positioning, accessibility and key anchors, is now one of the key levers at the owner’s disposal to deliver excitement, uniqueness and relevance in the commercial offer.

In summary, both shopping centre developers and owners, and retailers and foodservice operators, need to adopt a more strategic and data-driven approach to create a winning tenant mix and shopping venue for all.

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