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FSP Analyst Mel Watson recently attended an IPF/BCSC seminar, where there was lots of discussion on the UK’s food and beverage scene. The sector experienced significant growth in 2011 in terms of lettings and commercial space, although interestingly this trend reversed, dropping again in 2012.
Since the beginning of 2014 however, all of the headlines have been shouting success. At SnapShop we have been monitoring the sector as reports of growth and expansion continue to make the news. Now six months in, the Great British summer is well and truly underway, bringing with it increased tourism (international and domestic) and plenty of eating out opportunities. We’ve been taking a look at a variety of F&B names who’ve caught our eye – to see how their progress reflects the wider sector trends.
JD Wetherspoon
Who they are: JD Wetherspoon, established in 1979, now operate over 800 pubs worldwide. Offering an all-day menu, and providing a nightlife scene in partnership with Lloyds Bar No. 1, these pubs appeal to a wide variety of customers with the range of day to night dining and socialising options.
What their plans are: Last year, JD Wetherspoon announced its intention to open 30 new pubs by mid-July 2014. They have in fact opened 40 new pubs since then (taking into account 5 closures) and plan to continue that expansion with further openings for the rest of the year and into 2015. The chain has also pledged to invest in creating better customer areas with the hope of further increasing their popularity; plans include developing their pub garden spaces and implementing a system to enable faster credit card approval, allowing for a more efficient service.
In the news:
• Sales and profits up at JD Wetherspoon
• Opening date revealed for Wetherspoon’s first ROI pub
• JD Wetherspoon targets 40 new pub openings
Costa
Who they are: Costa, established in 1971, now operates over 1,500 outlets across the UK and Ireland on a franchise basis. Extremely popular and in hot competition with Starbucks and Caffé Nero, Costa are recognisable by their signature deep burgundy colour theme. A staple on many high streets, Costa is also a common addition to airports, department stores, service stations and within partner retailers’ stores, such as WH Smith, Waterstones and Homebase, with products of the franchise now available in supermarkets.
What their plans are: Costa’s plans are to continue building on the success of their stand-alone offering and in-store partnerships, while also looking more widely to expand a drive-through format. This will be a new revenue opportunity for the brand, but particularly in keeping with their success so far in service stations, which will enable them to target a more diverse consumer base. Costa intends to open between 10 – 70 branches over the next couple of years.
In the news:
• Costa to launch concessions in Debenhams
• Sales and profits soar at Costa
• Costa to accelerate expansion of drive-through format
Nando’s
Who they are: Nando’s was founded in South Africa, and first entered the UK market in 1992. It offers customers a sit-down fast food experience; with the self-ordering and speed of service you would expect from fast food, but with the niceties of a guaranteed table and menu additions such as wine which go above the usual fast-food offering. Since it came to the UK, the popularity of its signature Peri Peri chicken has grown and there are now over 300 Nando’s restaurants operating here, with a Nando’s range of products also available in supermarkets.
What their plans are: As with JD Wetherspoon and Costa, Nando’s are pushing for continued growth. They are looking to increase their portfolio, targeting thriving retail and leisure locations for new stores. Additionally, Nando’s are embracing the trend towards multi-channel - focusing on digital. Their recent loyalty card re-launch has been supported by an app and clever social media activity, and they have also launched a click and collect service. We are looking forward to what exciting digital advancements the hot chicken chain will make in the near future…
In the news:
• Nando’s launches click and collect service
• Nando’s to launch at Beaconsfield services
• Nando’s joins line-up at Hereford’s Old Market scheme
Tortilla
Who they are: Tortilla is a small chain of 15 restaurants in the UK, offering customers an authentic Mexican menu. Available to eat in or take out, the food served at Tortilla is made fresh, using traditional ingredients and made in the traditional Mexican way.
What their plans are: Last year Tortilla announced plans to open between 7 and 9 new sites this year, focusing on major UK city locations, and aiming to reach 40 nationwide sites over the next few years by continuing that rate of expansion. This year they announced some of the key locations due to open before the end of 2014, which include mainstream retail locations Lakeside and Westfield shopping centres, in order to increase awareness of the brand.
In the news:
• Tortilla announces new restaurant openings
• Tortilla to join intu Lakeside
• Tortilla announces expansion plans
It is positive to see that the UK’s F&B sector’s good health is continuing, a reflection in part of the increasingly positive economy, with many different types of food and beverage businesses planning expansion or entering the UK for the first time.
In the seminar last month Street Food was highlighted as a key emerging trend, as the flexibility and variety of that style of F&B offering appeals to shoppers who are becoming bored of the mainstream chains, which is particularly the case with the younger generation for whom eating out has become a more frequent occurrence. The lower cost of street food is an added benefit for shoppers still conscious of getting the most out of their money, with the ‘fast food’ speediness of serving and casual eating as-you-go aspects making Street Food an easy food choice.
F&B is being acclaimed by many as the ‘could-be saviour’ of the high-street and certainly as a must-have element of retail & leisure destinations – including shopping and outlet centres – as an added incentive for visitors and a way of increasing visit times, subsequently increasing spend for the other retailers. However, the overarching conclusion out of the seminar was F&B hasn’t yet been proven to increase spending in other high street retail shops and shopping centre owners should not just rely on those businesses to increase overall footfall and profits. A good retail centre needs to provide an even mix of leisure, retail outlets and F&B outlets in order to provide the best possible customer experience and maximise the revenue opportunities there.
FSP can help you do that, by undertaking the research and analysis needed to determine the best retail and leisure mix for your centre, be it a high-street, shopping or outlet centre. As the UK’s leading retail business consultants, we will work with you to make the most of your retail property assets. Find out more about our services here.
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