Shifting habits behind growth in global dining-out market

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 food and beverage offer is now critical to the success of any retail scheme, a new report by Cushman & Wakefield has revealed. According to the report, F&B options now account for more than 20% of options in new and redeveloped schemes, and are now “critical” to the success of any retail scheme. All four global regions examined in the report are forecast to experience growth in F&B expenditure over the next decade, led by Asia Pacific and the Middle East and Africa. Based on data from Oxford Economics, consumer spending by 2027 is forecast to nearly double in the Middle East and Africa from $182.5bn (£142.2bn) to $363.5bn and more than double in the former from $1.1tn to $2.3tn. As such, F&B spending is forecast to grow at an annual average of 7.4% to 2026 in both regions. Europe and the Americas, as more mature markets, are not expected to see the same increases in consumer spending but are nonetheless expected to experience healthy F&B annual spending growth of 4.9% and 5.5% respectively. Within Europe, Turkey will see the largest increase across the region, with an average growth rate of 8.8% in the F&B sector, although this is down on the 9.3% growth recorded over the past four years. The report states that Turkey’s youthful population and growing economy continues to power the country’s F&B market ahead of the rest of Europe, despite recent political upheaval and security risks. Central and eastern European markets, in particular Romania, Bulgaria and Poland, are also set for strong growth in the future. Spain was the largest F&B market in Europe in 2016, with consumer spending on eating out reaching $133bn, more than the figure for the larger economies of the UK, Italy, Germany and France. As spending increases, so too does customer expectations. Food courts – common seating areas surrounded by fast-food outlets – were once ubiquitous, but are now a dying breed. While mainstream brands, which are able to pay mainstream rents, still dominate, landlords are recognising the importance of diversity. Other concepts, such as the food hall, have also evolved, alongside a move towards creating different zones within shopping centres. The report suggests that there is latent demand for more non-mainstream international food hall concepts, which combine restaurants with food and beverage counters and bakeries, outlets selling cooking-related products and even cookery schools. Currently, only a handful of international players offer such a format and there is scope for more high-quality operators to emerge. Darren Yates, head of EMEA retail research & Insight at Cushman & Wakefield, said: “The link between shopping and eating is stronger than ever and is evident in the significant growth in F&B outlets in recent years, particularly in shopping centres. “We see this trend continuing, given that a high-quality F&B offer is now critical to the success of major retail destinations. More locations are now incorporating formats that combine the experience of eating and buying food and entertainment, which taps into consumers’ growing interest in food culture. “While the short to medium-term outlook for the F&B sector is positive, recent strong growth in the sector means competition in some of the more mature markets such as the US and the UK is intensifying. As a result, weaker operators may struggle if economic growth begins to moderate and consumers rein back on discretionary spending.” To send feedback, e-mail amber.rolt@egi.co.uk or tweet @AmberRoltEG or @estatesgazette