In the last 24 months there has been significant market investment in leisure developments and an increasing presence of food & beverage within shopping centres. This diversity has strengthened the industry and there has been a wave of new developments and extensions with a primary focus on F&B and leisure.
The obvious reason for this shift in strategy is the changing retail landscape: the ease of shopping from the comfort of your own home, and being able to choose when and where goods are delivered. Due to these developments, shopping centre management teams have pushed harder to lure the guest into the scheme and entice them to stay longer and spend more.
It is not only the digital and technological advances which are driving this change in the industry – in 2015 we saw higher employment levels and the highest wage growth in six years, which led to a growth in consumer spending of 3.9% by the end of November, as British households had greater disposable income.
Spending in the entertainment sector saw the strongest level of growth for the third year running in 2015, up 11.4%, a clear indication that consumers are spending their disposable income on eating out and leisure activities. Spending on entertainment (including restaurants, cinemas and other leisure activities) saw record annual growth, driven by a substantial 14.4% increase in restaurant spending, and the year’s biggest films including Spectre, Jurassic World and Star Wars causing a surge cinema profits.
In turn, these changing spending habits have led to a booming evening and night-time economy, with Property Management teams competing to provide the most enticing leisure offer. Typically, if a scheme intends to drive a strong evening and night-time economy, the presence of a cinema or other leisure offering is a necessity, as F&B alone has limited potential to push this.
Silverburn in Glasgow is a prime example of an out-of-town scheme which has been remodelled to adapt to these changes. Initially a 1,500,000sq.ft retail development, the scheme performs well with key tenants including Debenhams, Marks & Spencer and Next. By enhancing the offering with a 100,000sq.ft leisure extension, anchored by a 50,000sq.ft 14-screen cinema and 11 new restaurants, Hammerson has created an enticing environment where consumers want to spend time, solidifying the scheme’s position as an attractive alternative destination to Glasgow city centre.
A cultural change worth noting is the positive shift in public perception of health and diet, leading to a booming fitness industry and an increase in healthy or ‘clean’ eating. Recent data shows approximately 75% of 18-34 year-olds had eaten out in the last two weeks, and are no-longer satisfied with convenience F&B or fast-food – what they want is good customer service, reasonable prices and a diverse choice of fresh well-cooked food.
Combined with this is the rise in popularity of apps like Instagram and Snapchat, and the trend of sharing ‘who, what, when, where’ with other users and ultimately how the experience was for you. If you cast your mind back five years, eating out was an occasional treat but has quickly become a cultural past time, and instant picture and video sharing, geographic location tagging and on-line reviews have shone the spotlight on the importance of delivering good customer experience and excellent presentation, to safeguard brand reputation.
If shopping centres are to remain the destination of choice, management teams need to ensure they really understand the consumer, providing the right elements to attract. Admittedly large centres have a lot more space to play with, but with the right asset management strategy and a clear focus on the needs and wants of the customer, schemes can secure their position as the core hub and first choice destination within local and wider communities.
Shaunagh Durkin, Consultant, Foundation Recruitment