For the first time ever in 2016, U.S. restaurant sales eclipsed grocery store sales — and that’s good news for retail centers
The amount of space dedicated to food in retail centers has grown from 5% in 2007 to 15% today. And the trend is expected to increase to 20% by 2025, according to a study, “The Successful Integration of Food & Beverage within Retail Real Estate,” from the International Council of Shopping Centers (ICSC).
“The increasing popularity of dining out is revitalizing retail real estate around the globe by creating a true sense of community where people can go out to dinner, take in a movie and shop, all in one place,” said Tom McGee, president and CEO of ICSC. “Centers that are strategic and innovative when incorporating foodservices are sure to reap benefits such as increases in foot traffic, dwell time and number of visitors.”
The two main factors driving the growth are technology advancements and the rise of an experience economy, which was fueled by millennials and adopted by all generations.
Here is a recap of the main themes of the study, which explores foodservice’s impact on retail real estate: %
• Serving Up Tech: Foodservice has found that technology touches every aspect of the dining experience. From improving operational efficiency, ensuring guest retention or easing the ordering process, technology serves both as an enabler and disruptor to foodservice. Consumers are adopting technology services at fast rates and restaurants need to keep up with the pace and ensure they are offering the most advanced ways to order and deliver food.
• Eating Out Over New Sneakers: Today’s younger consumers are making it clear that experiences are far more important than the newest product, and the foodservice industry is one of the greatest recipients of their dollars. Restaurants are also seeing this as a rising trend with all generations, as dining out is considered one of the most popular experiences.
• Choosing the Right Menu: The expectations of diners, especially millennials, are high as they seek out sophisticated, unique and high-quality dining concepts. In order to meet the varied demands of consumers, shopping centers should provide a mix of local, national and international offerings.
In the U.S. and many other countries, chain restaurants are seeing challenges in maintaining foot traffic and are focusing on delivering decor and excitement that modern diners expect. Retailers and shopping centers need to be ahead of the latest gourmet trends, to deliver food concepts that encourage consumers to return.
• Location Matters: Details matter – especially when it comes to location of foodservice operators, as it is critical to attracting major foot traffic. The study recommends looking at two main factors when determining location strategy, the quantity of the surrounding foodservice and the category of foodservice.
Typically, 20% of foodservice space should be dispersed across an entire shopping center and feature food service categories such as “refuel and relax” (i.e., coffee shop) or “impulse” stores (i.e., ice cream or candy).
The other 80% should be clustered together and include fast-casual, fast food and casual dining stores, according to the report. Gourmet and finer dining establishments located at entry and exit points can draw in and retain maximum foot traffic.
To see the full report, click here.