Reflections on the future of food and drink in the retail space
Newspaper headlines cry out about the decline of our retailers – even big names are being ravaged by the rise in online shopping – and reduced footfall means that vacancy rates are the highest they have been for the high street in 4 years. Those in the food and drink retail industry are not certainly not immune to the tough climate, but there are opportunities for food and drink businesses outside of the much publicised CVA’s, however capitalising on some of them will mean tenants and landlords may need to think more innovatively and flexibly.
The ability to offer customers something different – such as an “immersive” experience – could become an increasing factor in drawing in customers to the retail space in future. Customers are increasingly influenced by their “emotional connection” to the retailer, so creating the right environment is key. For food and drink this may mean for example making sure their outlet can offer a great experience in warmer weather as well as in winter, such as having an attractive outdoor seating area. These factors are going to impact lease negotiations. Retailers will want more flexibility to do what they want with the space. This might even lead to landlords agreeing lower rents or all-inclusive rents to retain tenants who need to factor in the cost of creating and changing up the experience for the customer.
Technology is at the forefront of market developments. Apps that guide people around stores and shopping centres are something that food and drink businesses might benefit from. This creates ease for the customer, but also gets them away from apps and computers and into the store itself. Supermarkets in particular are having to adapt to the growing use of apps and home delivery. Independent food and drink retailers could also look to products such as Pixie, which is a loyalty and payment app for independent businesses. Technology has also been a driver in the success of companies such as Deliveroo, which has recently announced they are moving into 10 new towns. These apps offer restaurants access to new customers who may not have considered eating at that restaurant, but would consider the ease of trying their food via an app.
Consumers are also increasingly conscious of sustainability. Many now want to see what a retailer is doing to reduce its environmental impact, which can be an opportunity for businesses to differentiate themselves, whether by the ingredients being used, or the increase in re-useables such as the re-useable coffee cup. Some retailers have also been able to profit from the growing trend of vegetarian and vegan diets, for example, Greggs and McDonald’s and the vegan sausage roll and burger. This is something independent retailers might also be able to benefit from, as quirky features unique to independent retailers are often attractive to millennial customers who have increasingly less loyalty to big, traditional brands.
Like all businesses, food and drink retailers will have to continue to adapt to changing trends in the market and part of this will mean looking ahead to get the flexibility they require in their premises and leases to allow them to thrive in the future.
See our related posts on the trend for using shipping containers https://www.crippspg.co.uk/food-and-drink/shipping-containers-a-temporary-lifeline-to-city-centres-in-flux/ and on the rise of the on-demand economy: https://www.crippspg.co.uk/food-and-drink/the-rise-of-the-on-demand-economy-challenges-and-opportunities-for-the-food-and-drink-sector/