With the rise of online shopping and the term experience economy floating freely around, a lot of discussion is currently taking place on the importance of shopping centres providing an all-round experience that delivers customers value for the time and money spent.
As part of this paradigm shift away from strictly retail, we are seeing the quantity of floor space dedicated to Food & Beverage (F&B) within shopping centres increasing across the UK and mainland Europe. Whilst we are busy debating the ideal quantum of F&B space and the right category and operator mix within a given centre, has the industry perhaps overlooked an untapped opportunity that is already present in our centres?
Recent research published by the NPD Group showed that the breakfast market is one of the fastest growing sectors within the UK F&B segment. Research by Beacon in 2015 put some ‘meat on the bone’ in terms of the size of the eating-out breakfast market in the UK:
- £76m spent per day
- Average spend of £7.30 per customer
- 33% of consumers eat breakfast out at least once a week
- 15% of consumers eat breakfast out every day
This news comes as shopping centre investors continue scratching their heads over how to steady and, in the long-term, increase returns from F&B tenants. Tucking into the breakfast trade could be just what some centres need.
FSP knows the UK shopping centre market intimately and the ongoing trend is that breakfast trade is mostly limited to coffee shops and remains largely neglected by casual dining units. The reasons for this trend are not difficult to understand. It is largely because shopping centres are not typically seen as venues of choice for breakfast by the general public. There is the question of location as well. An Out of Town Centre has a very different captive audience to a City Centre Shopping Centre. Undoubtedly, many F&B operators have thought about providing a breakfast offer already but have either failed at the attempt or have simply chosen not to jump on the bandwagon.
If the former, how much of that is down to the landlord not giving enough thought, time and investment to the promising opportunity? If the latter, how much is that due to the operator’s inclination of doing things in a certain way, accepting the status quo and not challenging the established norms?
In both cases, the importance of an innovative and forward-thinking investor comes into play…In the same way as innovative companies are doing the previously unthinkable (Uber, Airbnb, Deliveroo to name but a few), FSP believes that forward-thinking shopping centre investors, owners, developers and asset managers should be leading the way in changing that perception among consumers and operators alike.
So what is the potential opportunity for operators within shopping centres? Let’s do the maths. Take a standard 3,000 sq. ft. Casual Dining unit with approximately 200 seats as our sample restaurant and make the following assumptions:
• 50 covers for breakfast per day, and
• Average spend of £7.30 per person
• £365 per day;
• £10,950 per month (for a 7 day centre);
• £131,400 per annum in additional revenue from just one unit
Easy on paper, right? Changing the perception about shopping centres and their role as legitimate breakfast locations will be a bit more challenging.
We talk about the importance of leisure elements within a centre. Extending retail opening hours so that F&B units can trade later into the evening is another much talked about topic. But surely, if the industry is serious about providing as holistic an experience as possible, serving breakfast – the most important meal of the day – should be part of that overall picture.
FSP, as the UK’s leading retail business consultants, is able to combine its unrivalled depth of market intelligence across both the retail and F&B sectors to help unlock the potential of their retail asset. If you are interested to hear more, please contact Harri at email@example.com.