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How can retail centres use catering provision to stay ahead?

Wednesday 9 May 2018 Data Insight & AnalyticsProperty DevelopmentShopping Behaviour

Frances Goodfellow's picture
By Frances Goodfellow

As the UK’s shopping habits change, retail centres are adapting to keep up. Previously in this blog, we outlined how convenience and purpose-led shopping missions are becoming less common as customers look for ‘engaging’ trips that are focused on shopping for leisure or pleasure.

This shift has led to a concurrent rise in catering provision as a vital part of retail centres. But as the catering boom is in decline and providers look for ways to evolve, how can retail centres stay ahead?
 

The rise of engaged shopping

After 600,000 interviews with UK shoppers, the findings are clear: customers are now less concerned with simply filling a functional purpose when they shop. They’re shopping less frequently, but spending more time and money when they do. 

These destination-led shopping missions currently only make up 23% of all shopping trips, but they represent 47% of UK shoppers’ overall retail spend. These trips, which are focused on shopping as a leisure-oriented experience rather than a necessity, often feature a significant catering spend. 

However, catering remains important in centres of all types. In fact, catering also features prominently in our most common category, the convenience-led shop, which sees high engagement with catering– with a conversion rate of 26% – but a lower average spend at the retail offering.

Shoppers that visit catering outlets spend 51% more on retail than those who don’t

In recent years, catering engagement has continued to grow. Conversion currently sits at an average of 31%, with the average spend of £11 during off-peak months – this is up from 2013, where catering conversion was at 29% with an average spend of £10. 

Retail landlords have clearly noticed this trend too. Shoppers that visit catering outlets spend 51% more on retail than those who don’t and also have a longer dwell time and an increase in the number of stores they visit. It’s no coincidence that recent developments and location expansions – like the intu Metrocentre Qube, Westgate Social Oxford and Whitely Shopping Centre – have included a large proportion of leisure and catering outlets.

catering-conversions
 

A new model for retail catering

This is likely to continue; many smaller centres have the headroom available to provide more catering options. However, with this significant growth in provision, many of the large flagship centres could be heading for maximum levels.

That means retail landlords will need to get more creative with how they structure and evolve their catering offer, to keep it fresh and engaging. But while smaller centres can introduce catering options such as cafés, larger centres will need to compete by offering ‘new’, rather than simply ‘more’.

Instead of handing out lengthy leases to big, established catering providers, some landlords are working towards an environment of rapid change, short-term leases aimed at bringing a unique offering to shoppers. 

Take the recently opened Feast Canteen at Kings Mall Hammersmith, for example. With five pop-up locations for some of London’s most sought after restaurants, the reimagined food court rotates its offering to give shoppers a new culinary experience regularly – and an extra reason to keep coming back.

Meanwhile, London’s network of Boxpark centres take the model a step further, curating an entire offering from pop-up traders in shipping containers. Following its success in Shoreditch and Croydon, a new Boxpark is due to open in Wembley in late 2018.

maximum catering levels

For the caterers themselves, this can be an appealing arrangement – particularly for smaller start-ups that are looking to get a foothold. Shorter leases mean less rent, lower commitment and less risk overall, and by proving themselves in these rotating placements, they may be able to prove demand, attract funding, and gain a foothold to go on to a permanent placing.

For landlords, this approach can increase their risk, as short-term leases mean less guaranteed income. However, they need to weigh this against the benefits – improvements in customer experience can lead to more return trips and better revenue in the long-term.

 

Reflecting on six years of shopper surveys

If you’re interested in learning more about how the UK’s shopping habits have changed over the past six years, you can dig deeper with our report: The Evolution of Retail.

In this blog series, we’re exploring the UK shopping landscape, how it stacks up to the past few years, and what’s in store for the future of shopping centres. For a more detailed look at how trends are changing, take a look at this blog post

We’ve also explored the role of click and collect, and how it’s presenting new opportunities for landlords and retailers alike, as well as whether Britain’s political climate affects spending.

Evolution of Retail

As the UK’s shopping habits change, retail centres are adapting to keep up. This shift has led to a concurrent rise in catering provision as a vital part of retail centres. But as the catering boom is in decline and providers look for ways to evolve, how can retail centres stay ahead?

How can retail centres use catering provision to stay ahead?