The wave of digital transformation has been one of the most discussed topics in recent years, and the emergence of the e-commerce market is one of the direct impacts that most of us encounter in our everyday lives. The practical option of having goods delivered to your front door, in some cases even on the same day they are ordered, has long since proved to be a structural threat to the retail sector. Shopping centres appear to be the most affected by this change and are under strong transformation pressure. The creation of "shopping experiences" and the focus on leisure shopping, it seems, are some of the most significant strategic options for repositioning. At the core is a strong focus on food & beverage (F&B) in shopping centres, more gastronomy and sufficient experience to manage this transformation process.
Catella Research has taken a closer look at both markets (UK & Germany) in the current issue of the Market Tracker, following the large success of the F&B model in the UK. Shopping center owners in the UK have focused more on F&B in their properties than in Germany. In recent years, several shopping centres have been refurbished for this new focus. Of the 43 largest shopping centres in the UK (larger than 70,000 sqm), only seven have not been renovated or converted since 2006. 18 of the largest shopping centres now have a food court with integrated marketing concepts, such as "Trinity Kitchen" in Trinity Leeds or "The Orient" in the intu Trafford Centre, the UK's largest food court. In Germany, on the other hand, this phase now seems to be about to begin. The question therefore arises as to how economically sustainable these concepts are.
The first step must therefore be to define the style of F&B, which is to be integrated as part of the restructuring process. We have defined four F&B trends for new shopping centers:
1. Experience shopping & dining
2. Convenience & individuality
3. Social media
4. Healthy & eco-friendly
The widespread transformation of shopping centers can be seen as an example for the repositioning and transformation of real estate from an earlier economic cycle for the current economic cycle. One thing is already clear: There have been cuts in the duration of contracts and in the sustainability of rents - at least in comparison with fashion retail which has dominated the centers for decades. However, the frequencies have also risen significantly over the same period. The new economic cycle has changed the strategic direction of shopping centres and causes them to be repositioned themselves as retail and leisure centres, with F&B being the most popular and at the same time most convenient form of leisure integration.
We hope you enjoy reading this latest analysis.