Shopping centres emerge as must-have locations for expanding restaurant concepts

By Luke Nicholls , 02-Mar-2012

Related topics: Business, Venues, Trends & Reports, Restaurant Trends, Restaurants

The intense competition for prime city-centre restaurant sites is spreading rapidly into shopping centres across the UK, as landlords, established food concepts and emerging brands are increasingly recognising the potential of such high-footfall locations.

The £1.45bn Westfield Stratford development is a prime example of restaurant operators recognising the potential of high-footfall shopping centres

The £1.45bn Westfield Stratford development is a prime example of restaurant operators recognising the potential of high-footfall shopping centres

The recently-launched Westfield Stratford City  saw over 70 food and beverage (F&B) outlets secure sites for its opening last year, while Galvin Restaurants, Richard CorriganPan Chai and Mango Tree  will all open at Harrods later this year.

“There’s a lot of competition amongst food outlets in malls, but securing sites within them is becoming vital for many quick service operators,” said Paul Backman, director of services at Horizons. The foodservice consultancy has just launched its Ones to Watch survey, tracking the emergence of new and expanding brands.

“Malls are becoming a microcosm of the high street, with all the big names represented as well as smaller, emerging chains,” Backman added. “They are also unforgiving – if a unit doesn’t work within a mall, then it is unlikely to work on the high street, so operators find out quickly whether their concept has staying power.

“Knowing the demographics of each shopping centre enables mall operators, and outlet owners, to take a far more sophisticated approach in targeting their audience with the right offer.”

Increased rents

This increased demand from operators is helping landlords of the sites to increase rents, despite many retailers struggling because of the challenging economy.

Capital Shopping Centres (CSC), which owns 14 of the UK's largest shopping centres, said last month that its passing rent from F&B offerings grew 25 per cent in 2011 after signing up major chains including Wagamama and Jamie's Italian.

David Fischel, chief executive of CSC, said: “Catering used to be a loss leader, but is now a proper tenant.”

Westfield Stratford

The £1.45bn Westfield Stratford development is a prime example of this emerging trend in the restaurant industry. It now features at least 15 emerging brands, showing rapid growth in the UK including café/bar concept Balans, Bumpkin, Cabana and Comptoir Libanais.

BigHospitality attended the East-London shopping centre for its grand opening last September, with the following video highlighting the area’s broad mix of new brands and emerging favourites:

Vincent McKevitt, founder of healthy fast food concept Tossed, told BigHospitality: "It’s our 8th site and our second in a shopping centre. To be a part of it is great. As a business, shopping centres have been very good for us."

Garry Hannay, general manager at Franco Manca Westfield Stratford City, added: “This is our third pizzeria and the first one we’ve opened in a shopping mall. It gives us a massive opportunity to bring the brand to the masses.

“This shopping centre site will bring our brand into the mainstream, giving us an opportunity to grow enormously in the next few years.”

Underdeveloped space

Kent Shopping centre Bluewater last month announced a redesign of The Wintergarden, adding 3,900 sq.ft of extra space and adding a new restaurant. Upon the redesign’s completion, Bluewater will host over 14,000 sq.ft of space dedicated to F&B.

This is not the first emerging trend that sees restaurants moving into new, underdeveloped space. Branded national chains are also increasingly recognising the high footfall potential of railway stations.

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