Shifting consumer habits behind growth in global eating out market

The increasing presence of food and beverage (F&B) options in shopping centres – often accounting for more than 20% of units in new and redeveloped schemes in more mature markets – is being driven by rapid global growth in consumer spending on eating out, according to a new report from Cushman & Wakefield.


With spending on eating out expected to continue growing over the next 10 years, and consumers’ desire to enhance a shopping trip with social and leisure experiences, a compelling F&B offer is now critical to the success of any retail scheme, the report states.

All four global regions examined in the report are forecast to experience growth in F&B expenditure, led by Asia Pacific and the Middle East and Africa. Based on data from Oxford Economics, consumer spending is forecast to nearly double in the latter (US$182.5bn to US$363.5bn) and more than double in the former (US$1,052bn to US$2,296bn). As such, F&B spend is forecast to grow at an annual average of 7.4% up to 2026 in both regions.

As spending increases, customer expectation does too. Once-ubiquitous food courts, made up of common seating areas surrounded by fast food outlets, are a dying breed. While mainstream brands – with ability to pay higher rents – still dominate, landlords are recognising the importance of diversity and other concepts, such as the food hall, have evolved, while there is also a move towards creating different zones within shopping centres.

However, Cushman & Wakefield believes there is latent demand for more non-mainstream international food hall market place concepts, which combine restaurants with food and beverage counters and bakeries, along with the sale of cooking-related products and even cookery schools to add ‘edutainment’. Currently, only a handful of truly international players offer such a format and there is scope for more high-quality operators to emerge and enter new markets.

Nomzamo Radebe, CEO of JHI – part of Cushman & Wakefield Excellerate

Nomzamo Radebe, CEO of JHI – part of Cushman & Wakefield Excellerate, notes the research reveals that: “South Africa has the most developed F&B market in Africa, with international brands continuing to make inroads into the country. International Brands are providing increased competition for domestic operators. A rising population of young people in Africa and the Middle East is attracting more international food and beverage brands. Growth in sales in the F&B sector between 2017 and 2020 of 5.6% is expected in South Africa.”

Radebe adds the tie-in between shopping and eating is stronger than ever and can be seen in the significant growth of F&B outlets in shopping centres in recent years.

Radebe adds: “This is a trend that looks set to continue. We are seeing a growing number of shopping centre owners viewing F&B as a key differentiating component for the success of their retail centres, and investing in creating more exciting F&B offerings for customers. This responds to consumers’ growing interest in food culture while also adding to the experience and entertainment people today want from their visit to a shopping centre.”

REGIONAL BREAKDOWN

AMERICAS

ASIA PACIFIC

  • Meteoric rise of food halls and restaurants is the biggest retail growth story in the US.

  • More than 24,000 new restaurants added annually over the last six years.

  • Food hall development pipeline has grown significantly: entire US food hall marketplace will have more than doubled in size in just four years.

  • In Latin America, the fast food industry has been growing thanks to the expansion of new shopping centres

  • Alternative concepts emerging to satisfy demand for healthier options combining high-quality ingredients and authentic food in a more pleasant environment than the traditional food court.

  • Concepts such as Mercado Roma in Mexico City have pioneered the way for others to follow.

  • India is forecast to have the strongest annual growth of F&B, sales between 2017-20 with an increase of 13.1%.

  • Average annual growth in China averaged 11.2% over the last four years, but this is expected to slow marginally to 10.7% a year between 2017-20.

  • Indonesia and the Philippines are both expected to see a strong acceleration in growth, with 10.1% and 9.6% forecast.

  • In Japan one major trend is the family friendly food court featuring elements such as an enhanced kids’ play area.

  • Adult-oriented urban food courts which differentiate themselves from the competition through celebrity chefs, or by bringing in local area restaurants, are also popular

EUROPE

AFRICA & THE MIDDLE EAST

  • Spain was the largest F&B market in Europe in 2016, with consumer spending on eating out ahead of the UK, Italy, Germany and France.

  • Turkey is forecast to see the strongest growth in F&B sales between 2017-20, with average annual growth of 8.8%,

  • Central & Eastern European markets Romania, Bulgaria and Poland also set for strong growth.

  • Developers creating different zones for fast casual, casual, premium casual and contemporary casual operators.

  • Continued trend of including a unique F&B anchor, whether this is a roof top restaurant or food market.

  • Landlords competing to stay ahead of the competition.

  • Saudi Arabia expected to see the strongest growth in sales in the F&B sector between 2017-20, with average annual growth of 8.8%. More modest growth of 5.6% is expected in South Africa and the UAE.

  • The rising population of young people attracting more international brands.

  • Diversification away from oil dependency towards other sectors such as tourism will support strong F&B growth over the medium to longer term.

  • South Africa has the most developed F&B market in Africa, with international brands continuing to make inroads into the country

  • Operators such as Starbucks and Krispy Kreme providing increased competition for domestic operators.

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