First published in the Across Magazine, Issue 3.
I think that everybody knows that foodservice in Shopping Centres is growing. It has become a more important part of the tenant mix as we shift from a consumption based economy to an experience based economy. The proportion of guests visiting Shopping Centres who choose to eat is rising rapidly as the provision, choice and variety also increases. I am certainly not going to be the one that “calls” the “top of the market” yet. I am certain that we have only just begun to understand how to satisfy consumers with foodservice.
It is relatively easy to estimate and calculate the size and scale of a foodservice offer in a Shopping Centre when the footfall is steady, consistent and evenly spread throughout the week. This is typical of many larger City Centre projects and most of the Out of Town regional destinations. But we mustn’t forget that these do not represent the majority of the Shopping Centre industry where there are numerous types of locations that have highly variable footfall. For example, secondary Centres, Outlet Malls and Retail Parks across Europe see massive differences in their footfall from weekday to weekend.
This creates a real challenge, as it is extremely hard to provide a foodservice offer that is the right size to allow the consumer to have what they need when the footfall may be five times greater at a weekend than on a weekday. Sensible planning of foodservice would dictate a small number of units to ensure that there is enough business for everybody but these would likely be overwhelmed at the weekends. This particular problem has challenged Outlet operators for many years and it is a double headed problem in that foodservice in the Centre is not maximising income, but also, and most importantly in the experience economy, guests are leaving dissatisfied.
So what are the solutions and how flexible can food service really be to the problem of highly variable footfall across a trading week or year?
Street Food – We have talked before about the ‘rise and rise’ of Street Food and it would be a great way for retail destinations to increase their foodservice capacity for limited periods of high demand. We often see them at Christmas, as part of a Christmas Market, but I believe that there is an opportunity for having a designated area that allows local Street Food traders space at weekends or other busy times throughout the year.
Food Trucks – Rather than a whole Street Market, a similar impact (but at smaller levels) can be made by inviting specific Food Trucks to set up. These operators, who often have a huge and loyal following, see @kogibbq from Los Angeles with over 125,000 twitter followers, can operate from as small a space as a single car park spot – in fact the only problem with space might be for the queues that they generate.
Satellite and Pod units – Creating a ‘satellite’ unit that is operated under the brand of an existing Tenant but operates only during busy periods provides additional capacity. These can be located adjacent to the main unit, or remote in a different area of the Centre. Often a satellite unit offers an ‘express’ or ‘light’ version of the main offer to deliver a faster point of sale over busy periods.
A great example of a satellite unit (coincidentally in the form of a Food Truck) is at McArthurGlen, Cheshire Oaks Designer Outlet. Ed’s Easy Diner already operate a Restaurant unit on site and in addition they operate “Ed’s Shakes and Hot Dog’s” truck at busy times. The Truck serves a limited menu focussed on grab and go and faster food options whilst the Restaurant serves the full Ed’s menu.
Oversized Units – A more permanent solution is creating foodservice units that are deliberately ‘oversized’ for the day to day trade but have ‘hidden’ seating areas to allow operators to maximise trade when footfall is high. The Avenue at the O2 is a great example of restaurants designed to cope with both ‘feast’ and ‘famine’. Many of the Restaurants trade over two floors, meaning on non Event days a small and intimate ground floor is used (because no one likes to sit and eat in a vast empty restaurant) and then on event days when 20,000 – 30,000 people are on site they open large upper level seating areas.
The reason we are not seeing this in Shopping Centres at the moment is that the Lease structures and valuation methods don’t easily allow this type of approach. Landlords and developers are looking for certainty of income and long Leases. What this approach requires is flexibility around a core offer. This means that the bulk of foodservice provision can be delivered by lower risk, long lease, branded, strong covenant, Faster Food and Leisure Dining operators (indeed we would always recommended this as these offers and operators remain amongst the most popular and successful foodservice operators in the world), but these should be supplemented by some shorter Lease, perhaps even temporary traders who offer variety even if it is at a slightly higher risk profile.
We are certain that we are going to see a lot more of this flexibility being built in, especially in the Outlet Park and Retail Park sectors where it is the only way, in our view, of delivering foodservice to guests when footfall varies so much between the weekday and weekend.
The other thing to think on is that the consumer demand for food and food markets is high, and if it is not provided by the Shopping Centre industry then it will be provided elsewhere, a Street Food market or Food Truck can literally pop up anywhere.
I am really excited about discussing how shopping centres are embracing foodservice as way to provide exciting and vibrant leisure and shopping experiences at the BCSC Food’s in Fashion Series today. I think that the great speakers including TGI Friday’s, Drake & Morgan, and the Great British Menu’s Oliver Peyton will give a great insight insight into the impact of the foodservice evolution.