Time to dine out

Angela Goodings

Angela Goodings, Associate Director Of Research, discusses the changes in consumers' spending habits when visiting shopping destinations.

Over the past two decades, the UK market has undergone seismic changes in the catering industry; an evolving market moving from the ‘greasy spoon’ (cafés) to American fast food multinationals and coffee shop domination.

Today, the market is as hot as ever, with healthier food offerings and new dining concepts becoming increasingly popular. The UK has experienced significant growth in restaurant rents as new occupiers take up space and existing ones continue to open new stores.  Consumer habits are also changing; CBRE reported approximately 40% percent of shoppers purchase a meal or snack during a shopping trip, compared to 20% in the late 1980s.*  

Whilst UK restaurants have been a magnet for overseas occupiers, the European market remains dominated by local traditional operators.  As a result, we haven’t seen the levels of rental growth within the sector as has been witnessed in the UK. Despite this, the ‘food & beverage’ sector will become an increasingly important element of our European cities make-up and shopping destinations. People are spending a larger proportion of their income on eating out. The chart below highlights spending growth over the next five years for ‘clothing & footwear’ versus ‘eating out’. In Sweden, Hungary, Germany, France and Italy, consumer spending growth in ‘eating out’ is forecast to be stronger than spending on ‘clothing & footwear’.

This will provide opportunities for asset managers of shopping centres and mixed-use office units to increase restaurant occupation to capture this spend and drive rental tones. Increasing the catering footprint will help future–proof locations with the added benefit that ‘eating-out’ will remain internet-proof. Restaurant provision creates destinations which are vibrant during the day but also enhances night time activity. Further opportunities will exist for developers and investors to create food-driven leisure hubs in cities to capitalise on consumer spend.

*CBRE IN_restaurants Spring 2015 report

Time to dine out

 

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Angela Goodings

Angela Goodings

Associate Director of Research

Angela's biography