My take on food in Shopping Malls
FOOD AND BEVERAGE IS A STRATEGIC ISSUE FOR RETAIL PROPERTY COMPANIES
The latest edition of MAPIC, the international retail property trade show, has been an opportunity to figure out how retail property companies are engaged to provide their visitors with better food experience in malls. I encourage you to read my 10 takeaways about Mapic article I published a few days ago to get some insights.
We can all acknowledge that major improvements have been made over the last decade in malls when it comes to food. Food areas accounts now for 30 to 40% of the global lease area and many new “fast casual” and “healthy” food concepts have popped up in many malls to enrich the customer experience.
SOME PAIN POINTS STILL REMAIN
Shopping malls are dominated by global mainstream food brands that are appreciated by working and middle classes, who are generally over represented in shopping centers. And, since these brands can afford paying high rents and operating expenses, they continue to proliferate even in the new generation of shopping malls.
Even trophy assets like “Les Quatre Temps” in La Défense business district near Paris, which food area is one of the most performing one in the country, has set up an official opening event to welcome a new KFC Restaurant. Not the kind of brand we spontaneously think of when Unibail – the owner of the mall – tries to promote its “dining experience” model to embody its ambition to turn its malls into favourite and comfortable meeting place.
Whereas major property companies are upgrading their whole merchandising to attract wealthier consumers, food courts evolution is still in midstream.
Why is that ? In my opinion this is due to five major reasons.
1- ARCHITECTURE AND DESIGN
Retail property companies have massively invest to turn shopping malls into modern and pleasant areas. Costly materials, natural light and fancy furnitures have been put together to provide visitors with a modern and catchy environment. Anyway, design and architecture have often lead to sterile landscapes.
New shopping malls are clean and beautiful but most of the time vibrations and authenticity are missing. And this is a pain point for demanding and affluent customer groups who generally appreciate original non-standardized retail propositions as well as places with an historic heritage.
Since shopping malls tend to choose the same kind of designs and decors, it is no surprise to see how fast a new competitive status quo occurs. Outdated shopping malls can catch up with the competition within a few months through renovation works. A sign that shopping centers are still more focused on “hardware” than “software”.
2- FOOD AREAS LAYOUTS
In France, food court are suffering from a negative image among retail property companies. I think that they are still confusing about the food court concept and the boring way it has been executed so far.
When food courts are designed to create an immersive and surprising environment, people love them.
3- THE SELECTION OF FOOD BRANDS
Shopping malls need the right balance between mainstream food brands and original ones. To achieve this goal, leasing teams are challenged to attract talented independent restaurant owners to settle in malls.
But the least we can say is that this goal remains complicated. Independent business owners are not at ease with shopping malls environments and rules (for example to be open 12 hours a day even on sundays not to mention high rents and operating expenses).
Another pitfall for retail property companies is the chase for the most innovative food concept. Although it can be profitable in term of PR, it has little chance to be successful on the market. Nothing compares with French or Italian basic meals, prepared with talent, to attract a constant flow of loyal customers.
4- ADAPT FOOD CONCEPTS TO THE MALL ENVIRONMENT
It would be easy to be too hard on shopping malls owners and their short term financial vision to explain why food areas are still a bit dull. Brands have to play a significant role to really grab the most out of shopping centers environments.
Food brands have a tendency to duplicate their concepts whatever the shopping center without adapting their offer to the local conditions. Between trophy asset malls in affluent areas and regional shopping centers in underprivileged catchment areas, it would make sense to slightly adapt food concepts, wouldn’t it ?
It goes the same with flexibility within the concept in itself. In France, food courts in malls are struggling at night when there is no leisure activities provided. But, it is still very rare to see food brands propose more comfortable decors and services (like table service).
5- CREATE FAMILY ENTERTAINMENT CENTERS
Shopping malls that will perform tomorrow will be those with a comprehensive line of leisure activities connected to food areas. An environnent that will encourage people to spend many hours in the mall and bring family together. Explore Jihua Park shopping mall concept to figure out what I am talking about.