Restaurants and cafés take bigger bite of UK retail and leisure market

July 4, 2017 11:48 am

Food and beverage operators plan to capitalise on current changing shopping habits.  Notably, they plan to open nearly 3,000 new restaurants and cafés by the end of 2018.  These are some of the highlights from Cushman & Wakefield’s UK Food & Beverage Market report.

The changing face of the high street

Online shopping growth has resulted in the decline of clothing and white goods stores.  As a result, shopping centres have focused on opening cafés and restaurants.  By improving the overall shopping experience, they aim to encourage consumers to shop for longer and spend more.

Cushman & Wakefield surveyed 95 F&B operators on their future plans with results suggesting there will be a net addition of 1,414 units in 2017 from these operators and the wider market followed by 1,515 in 2018.  These expansion plans will require consumer F&B outlay to increase by a net £674m and £722m respectively.

Research reveals that between January 2014 and January 2017 clothing, footwear and white goods shops decreased by 2,185.  At the same time, the number of restaurants and cafés increased by 2,998 – representing growth of 9%.  As a result, F&B now accounts for one fifth of all retail and leisure units.

Food and Beverage (F&B) sector

Cafés, fast food and takeaways have seen the strongest growth within the food and beverage sector.  In fact growth amounts to an additional 1,527 and 1,035 units respectively in the last three years.

Over the same period, the number of restaurants has increased by 897, with expansion of American food operators.  American cuisine growth has come at the expense of Indian and Chinese restaurants, reducing by 205 and 192 sites respectively.

In addition, the report shows that food and beverage expansion has also become increasingly dominated by multiple retailers.  Multiple retailers are defined as those with five or more outlets.  These operators accounted for 37% of net expansion in 2014, increasing to 49% by 2016.  It is fully expected this market share will continue to rise as multiple operators expand their presence across the UK.

UK consumers’ taste for coffee has also risen dramatically since 2000.  Moreover, Costa, Starbucks and Caffè Nero continue to lead the way with strong expansion plans.

Growth in the eating out market is expected to be 3.8% in 2017, well ahead of total consumer spending.  The latter, consumer spending, includes clothing and footwear, household furnishings and food.  From 2016 to 2021, the eating out market is forecast to increase by 17% and be worth over £103bn.

Property experts’ views

Thomas Rose is Head of Cushman & Wakefield’s Leisure & Restaurants team.  Thomas said: “Online retailing has grown rapidly.  And, as a result, consumers are changing their habits.  Food and beverage outlets offer an experience that cannot be replaced wholly online.  And these present a fantastic opportunity for landlords to increase dwell time and expenditure within their centres.  They also allow them to capture a larger slice of the total available catering market.  The centres thus move from pure retail to experiential destinations.  This means that people don’t just go to shop there but also to socialise and be entertained.”

Ed Purcell is Associate in the National Retail agency team.  Ed commented: “Demand continues from existing and new leisure and restaurant operators.  These wish to enter and expand within the Midlands market.  This is due to a number of reasons.  Continued inward investment by companies in both services and manufacturing have led to increased employment.  Equally, we have seen uplifts in population as people relocate and higher consumer spending on food and leisure activities.”

Darren Yates is Cushman & Wakefield’s Head of Retail Insight.  Darren added: “The total growth in the eating out market can sustain the projected growth in outlet numbers.  However, several risks remain.  These include higher inflation, potential business rate and living wage increases and tighter labour laws post-Brexit.”

Looking to open a new outlet?

Are you considering opening a new café or restaurant?  If so, Ashfield and Mansfield might prove the perfect investment location.  The good news is that we’re here to help those looking to locate their ideal property.  We can offer a totally FREE and confidential commercial property search across Ashfield and Mansfield.  We’re here to take most of the hassle out of this process, providing you with a tailored search of all properties suitable for your business.  Equally, you can perform your own online commercial property search or contact us and we’ll do it for you.  In addition, if you are an independent operator, you might also be able to access our range of business grants.

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