BY JONATHAN DOUGHTY
25 years ago, life was pretty simple. There were a few major restaurant chains across Europe, one or two in each country, and they provided the tenants for all the developments that took place. This group of operators grew slowly but steadily and 10 years ago we had a reasonable choice, but it was very much “country by country” and “sector by sector.”
Companies like SSP and TRG dominated the airport market; Autogrill the travel and roadside market; and McDonalds, KFC, and Burger King the fast food market in shopping, transit, and leisure. It was the same picture almost everywhere you went – each country in Europe had its own brands. France, Spain, Portugal, Germany, England, and the newer entrants all developed foodservice with great speed, but without providing much choice or variety.
Guests started to behave unusually
And then the change happened. Nobody is quite sure when and where it first started, but customers, “guests” as we like to call them at Coverpoint, started to behave unusually. They didn’t want to go to the big chains as much, they were not that “sure” about using them and they spent more time looking for diversity, choice, and quality. I am sure it was driven by the availability of information and the fact that every consumer now has access to information on restaurants, food, and locations on her own device. The digital age has truly changed the way in which people recommend restaurants, how they behave in them, and how they write about them. It is a “live” experience now to walk up and down a street and decide which restaurant to go in, based on TripAdvisor, Booking.com, or any one of the millions of review and listing sites. The world went digital thanks to devices none of us knew we needed – the iPhone, iPad, and, of course, the multitude of tablets and devices that followed them.
The “guest” is now much better informed about the options and places to eat anywhere they go and the world of shopping centers has to catch up. Our advice to clients now involves their digital and online strategy around food, as the dining experience is one of the few things that can’t be offered online and so provides a real point of difference for a shopping center. The access to a wide array of information means that customers can more easily leave a shopping center, especially if it is in a city or town, to visit a great café, restaurant, or bar nearby – their phones will tell them where it is, how far to walk to, it and how good it is! The shopping center, on the other hand, will probably only indicate what brand it is and which unit it occupies.
Boredom as the biggest enemy
The shopping center industry must rise to this challenge. It is no longer acceptable or appropriate to lease the foodservice offer in a shopping center to the same brands and operators that have always been around. It is no longer acceptable for those brands to go from year to year without working on brand changes, menu development, refreshing the offer, and keeping up to date with their “guest” proposition. Boredom is their biggest enemy and the “guest” in shopping centers gets bored quicker and more easily because they know there is very often a better choice outside the center.
So what to do? Well for us at Coverpoint, it is very simple. You bring into the world of shopping centers the operators who are interesting and local to your project. We have for a long time been talking about shopping centers having up to 25% of their foodservice tenant mix from the local or regional market to counter the “boredom” and stop the “fascia fatigue” that plagued retail in shopping centers for so long. We have to keep it fresh and different!
A change of mindset
I am well aware this is easy to say and not so easy for most to do, but the industry’s mindset needs to change, as do some of the lease lengths and ways in which valuations are carried out. Local and regional tenants are not “window dressing” for the center. They are substantial and good reasons why “guests” want to visit and come back regularly. Great restaurants in fantastic locations can exist in shopping centers but they are seldom run by the chain operators.
When Coverpoint joined JLL, towards the end of 2014, one of the most exciting projects that we started was to capture globally every one of our foodservice surveys digitally in a GIS database. As some of you know, we travel the world and survey towns, cities, districts and locations for their foodservice offer, capturing really important data including who the great local and regional operators are. For many years, this was done manually using spreadsheets and collection tools, but we have now been able to launch this in a PDA version that allows an even greater level of data capture on iPads and iPhones. This will make us more efficient and allow us to do more research in this critical area, but it will also allow us to provide our clients with much more information on who the “new,” the “cool,” the “great,” and the “good” are in the cities and towns in which their shopping centers are located.
We have just gone live with the new technology and the first results are very positive indeed. It is going to provide a huge amount of data for our business at JLL and for our clients. It will allow them to reach out and talk to these operators, engage with them, and hopefully attract them into their projects, providing a much needed change to the tenant line-ups we are all used to. This will, in my view, also have the effect of making the established foodservice companies look long and hard at what they do and make changes to improve and freshen their offer. Everybody wins.
These are exciting times for the foodservice industry, which is driven by competition, change, and new entrants every single day. Keeping up to date is a challenge, but there is a lot of eating and drinking to do along the way. Cheers!
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