Retail is constantly being reshaped by the interplay between economic, social and technology, add to that changing customer expectations as well as the emergence of new business models and channels.
To assist our clients in navigating this change, MacroPlan are unpacking five key trends that will impact the future of the retail property space. The second trend in our five-part series focuses on food.
Trend two: Food – the saving grace of Australian retail
In the early noughties, the food court consisted of, say, 12 operations. Generally, they were good. At this time, there was one food court in Sydney CBD that stood out as Sydney’s best. There was no stopping it. The managers were proud knowing they ran the best show in town.
The advent and roaring success of the Level 5 food hall in Sydney Westfield and the refurbishment of the food offer below Myer dented the its fortunes, as did the exodus of a significant portion of the commercial tower above. It soon became a dinosaur with dated designs and fitouts, and soaring rents that continued unabated. The lunchtime shopper was enticed elsewhere.
Fast forward 15 years.
That same food court has completely reinvented itself and been transformed into an even more successful entity, leading the charge for the precious lunchtime dollar and capturing spend from early morning to late afternoon. The most striking change, though, is the conversion of so many originally non-food tenancies, to food tenancies. And there is no sign of abatement, with the sprawl set to continue.
Food and beverage retail is spreading its tentacles in to every street, arcade, laneway, precinct, rooftop and basement in town. In fact, Brain & Poulter Food Consultants report that the growth in the number of food tenancies in Sydney CBD alone is outpacing other retail growth by 3:1.
This Sydney CBD example is just one of countless across Australia where food has transformed the retail landscape, particularly in shopping centres. And it’s easy to see why.
Not only is food and beverage the ultimate defence to the burgeoning world of online retail, it offers countless advantages to landlords seeking the nirvana of viable retail, secure income and increases in asset value; discarding the old, ushering in the new.
In the suburbs, food retail has soaked up thousands of square metres of barely or under-performing retail and gone well beyond; underpinning massive investments, centre refreshes and extensions. Quality operators have grown their empires (and some have lost them…), enticed with substantial fitout incentives, long leases and the chance to be offered the next great opportunity in another centre’s gleaming new wing. Food Inc. has become King.
In a blurred world of fresh food, grab ‘n go and casual dining, the master chef inspired shopper will enjoy a break with friends, or catch a movie, getting a second wind before shopping again. They will then march on, spend more, find their car (hopefully) and eventually head home.
Food is exciting. It’s colourful. It’s fun. And it’s theatre. It’s the social glue that humans need. It can’t be replaced.
General Manager – Retail