The world of retail is changing, and high-quality restaurants and dining places have become an increasingly important part of the mix over the past five years. Angela Jameson finds out where the next big opportunities for restaurants in retail developments are going to be
Landlords are more interested than ever in the type of restaurants they bring into their retail developments.
New centres such as Liverpool One and Westfield London have shown that diverse and interesting restaurants are essential to create the right atmosphere in a centre and encourage shoppers to stay longer.
Some landlords estimate that shoppers who visit a restaurant spend, on average, two-thirds longer in the centre, with a commensurate increase in their spending. That makes for some compelling opportunities for restaurateurs. But where are the major new developments going to be?
town centre (regeneration of area )
● 750,000sq ft
● 50 retail units
● 10 restaurants
● Cineworld 12-screen cinema
● Customer profile: A, B, C1
● Legal & General/Schroder Property Investment Management
● Expected to open 2015
2 Westfield Bradford
● 580,000sq ft
● 70 retail units
● Restaurant units: not disclosed
● No cinema
● Meyer Bergman/Westfield
● Opens 2015
(regeneration of area )
● Opens in 2018
4 Leeds Victoria Gate Shopping Centre
● One million sq ft
● 30 stores
● Six to eight restaurants
● Hammerson/Town Centre
● Expected to open 2016
5 Brent Cross
● 592,000sq ft extension
● Number of retail/restaurant units: not yet known
● Customer profile: A, B, C1s
● Hammerson/Standard Life
● Possible opening 2018
● Intu Victoria Centre extension
● 500,000sq ft
● Number of retail units: not yet known
● 12 restaurant units
● Opens 2015
Westgate Shopping Centre
● Extension 519,000sq ft
● 70 shops
● Number of restaurants: not yet agreed
● Multi-screen cinema
● Land Securities/Crown Estate
● Opens 2017
● City Sentral
● 650,000 sq ft
● 82 stores, including a department store
● 11 restaurants
● 80-bed hotel
● Realis Estates
● Opens 2016
● Old Market scheme
● 310,000sq ft
● 22 retail units
● Seven restaurants
● Six-screen cinema
● Customer profile: A, B, C1s
● British Land
● Opens spring 2014
Source: Trevor Wood Associates
Forthcoming shopping centre developments (over 500,000sq ft)
1 Bracknell town centre
This comprehensive redevelopment of Bracknell’s largely 1950s shopping centre has been in the offing for years. Demolition finally started this summer. Marks & Spencer will anchor the centre and there will be a 12-screen Cineworld cinema. The Berkshire town has an affluent catchment area and its residents have been underserved for many years, with a poor selection of shops. The developer is looking for mainly family-friendly casual-dining restaurants.
2 Westfield Bradford
Westfield Bradford has had a troubled start. Work began on the Yorkshire city’s new shopping centre in 2004 but was stopped by Westfield in 2008 in the teeth of the recession. The stalled construction site was dubbed the Bradford hole by local residents. But Westfield vows to start construction later this year, and the cost will be about £260m. Confidence that the scheme will be completed, according to revised plans, was underlined last year when the shopping centre developer forward-sold the scheme to investor Meyer Bergman. Marks & Spencer, Debenhams and Next have all committed to the scheme.
Westfield is committed to seeking out unique restaurateurs and café operators for its malls and likes to try companies that have never been in a shopping mall before. There is an emphasis on casual family dining, but more sophisticated restaurants are also encouraged.
Bradford has the fourth-fastest-growing working-age population of any major UK city and has a catchment area of 2.2 million people, drawing from the wider Yorkshire area.
Westfield and Hammerson have put aside their long-running differences over Croydon’s future to join forces in a £1b regeneration of the south London town centre.
Planning is at an early stage, so there is little detail about the number of restaurants or the number of shops. The mall will be built on the site of the existing Whitgift shopping centre and will need to satisfy a local community that was hit by riots in 2011. It will also aim to draw in more affluent Surrey commuter-belt shoppers, who have avoided the once-vibrant town centre in recent years. The new centre is expected to have significant leisure elements, including restaurants, bars and a cinema – as befits what will be one of Europe’s largest malls.
Hammerson plans to create a luxury shopping mall to rival Trinity Leeds, which opened in March. The entire shopping centre could eventually cover more than one million sq ft, but initially, Hammerson will build a John Lewis anchor store and 30 other retail units in about 420,000sq ft of space. There will also be a casino. Work is expected to start on site next year, with the opening of the first phase in 2016. A second phase will then start, with a potential opening date in 2019.
Hammerson wants to tap into the highly affluent catchment area, which includes Harrogate, Ilkley and York. Leeds is already home to some of the world’s leading brands, such as Louis Vuitton, Mulberry and Vivienne Westwood. Victoria Gate’s restaurants are aiming for a similar level of luxury, ranging from a “higher end” restaurant to an afternoon-tea style café.
5 Brent Cross
Brent Cross, which opened in 1976, is the UK’s oldest shopping centre. At just under one million sq ft, it serves a catchment area of two million people and attracts 15 million visitors a year. The new extension will have a large leisure element as the developer looks to bring the centre up to date and retain its natural customer base, which may be tempted away by Westfield’s giant malls to the east and west of London. Developer Hammerson says it wants to be able to offer more dining options to compete with other retail developments.
The extension will see a network of new streets, lined with shops, connecting three anchor department stores. At the same time, the existing centre will be fully refurbished.
As well as new restaurants, there is likely to be a cinema on the site of the current surface car park, and possibly a hotel.
Although they received planning permission in 2010, Hammerson and Standard Life are still working on some revisions to the first phase and will submit a revised application towards the end of this year. Work should start on site in 2015.
Intu, the recently renamed Capital Shopping Centres, is spending £35m on refurbishing and extending the Victoria Centre in Nottingham. The mall already receives 23 million visitors a year and this two-storey extension is intended to attract more shoppers and increase their dwell time. A further extension, to the north of the centre, is still being considered by Nottingham City Council.
Catering is very important within the new mix. Helen Carr, head of catering at Intu, joined the company 18 months ago with a brief to improve the restaurants in centres. Intu has been putting in new brands, including a very successful Champagne bar called Circle 360. “Having a meal out or a drink is part of the treat for many of our shoppers,” Carr says. “They come here to socialise and restaurants and bars play an important part in that.”
Intu says dwell time and spend increased by two-thirds in 2012 for those customers who visited a catering outlet.
7 Oxford Westgate
Oxford is under-served for shops, according to the Crown Estate and Land Securities, which wants to extend and refurbish its existing 1960s shopping centre. John Lewis will open a small 32,800sq ft store and the centre will have a multi-screen cinema. There are plans for a roof terrace with views over the university town’s dreaming spires, and restaurants and cafés will be an important feature of the open-air centre.
Land Securities says that the leisure element in one of its schemes would once have been about 12% of the number of units, but these days 20% or more is the norm. One of the main reasons is that leisure spend has consistently outperformed retail spend. Last year, retail sales in Land Securities’ centres were flat, but food and beverage sales rose by 4.3%.
City Sentral’s developers claim the new centre will make Stoke-on-Trent one of the UK’s top 30 shopping destinations. It will certainly serve one of the country’s least-tapped shopping catchment areas. Stoke is one of the UK’s 15 biggest cities by population size, with 360,000 people living within 20 minutes of the city, making it comparable to Guildford or Exeter. Work on the new centre began in 2011 and a 100,000sq ft Marks & Spencer will anchor it. A bus station to serve the centre has now opened, quieting the doubters over a project that has been planned for more than 10 years.
British Land is building this open-air shopping centre, known as the Old Market scheme, on Hereford’s former cattle market. Debenhams will anchor the centre with a three-storey, 84,000sq ft department store, Waitrose has taken 22,000sq ft of space and Odeon has signed for the cinema. Next, TK Maxx and Frankie & Benny’s have also committed to the scheme.
British Land has let more than 100 food and beverage units across its portfolio in the past two years, which will help to increase footfall in its centres.
Charles Maudsley, head of retail at British Land, says: “The physical store will remain part of retail’s DNA. Despite the evolution of online and mobile retailing, internet sales account for just 8.5% (CBRE) of total national sales. Customers want to enjoy the experience of visiting a store and touch and feel what they’re investing in.”
KEY FACTORS FOR A SUCCESSFUL RESTAURANT IN A SHOPPING MALL
The top five features of a retail development that help drive restaurant trade:
Proximity to good road and rail links. Access through public transport is becoming increasingly important, especially for in-town shopping centres, although many customers still drive to big out-of-town malls.
2 Quality of catchment
Developers want affluent shoppers nearby or within a half-hour drive. Many big shopping centres have more than two million people on their doorstep.
3 Breadth and depth of the retail and leisure offer
Developers have to offer shops that were not available before. Similarly, a variety of leisure activities, including bars, restaurants, cinemas, hotels and casinos, can drive all-day trade and create a night-time destination, from which restaurant operators benefit. Two examples of this are the Trafford Centre, which houses the UK’s only Legoland discovery centre, and Westfield Stratford, which hosts the UK’s largest casino. The International Council of Shopping Centres suggests 52% of cinema attendees also visit other mall stores or restaurants.
4 Environment, management
Maintaining a pleasant and safe atmosphere in the centre is very important, especially for night-time dining
5 Unique and
Variety in shops, cafés and restaurants is essential. Restaurants, just like other tenants, will be expected to refresh and refurbish their format part-way through a lease.
Source: Intu, Westfield, Land Securities, Cushman & Wakefield
HOW WAHACA CONQUERED THE MALLS
Taking Mexican street food off the streets and into shopping centres was never in the plan for Mark Selby and Thomasina Myers, the business partners behind Wahaca. But their restaurants are a hit in some of the UK’s biggest malls.
The first mall they opened in was Westfield London – and they have not looked back since. Right from the start, the Westfield pitch, which opened in 2008, was unconventional. It was outside the actual shopping centre on a restaurant street, in the open air.
Westfield was very supportive and allowed Selby and Myers to use the recycled materials they wanted to create their look and style.
“We thought Shepherd’s Bush was a good residential area, the evening trade could be strong and it had outside space and we could create our own buzz and environment,” Selby says. But it wasn’t that easy, particularly as they opened in the teeth of the recession.
For Selby, the first shopping centre proper that Wahaca operated in was Bluewater, the vast Kent mall. There they discovered that the restaurant group was much less known in Kent than it was in central London.
Selby says it takes a long time for shoppers to become familiar with the restaurant, particularly as they may visit the shopping centre only three or four times a year. “Half of our diners are new to us, whereas in the London estate it is probably just 10% of the trade,” he says. “The restaurant will have a longer growth profile than a London one.”
As a relatively new concept, Wahaca is battling against the familiarity of some brands.
Time-pressed shoppers don’t like to take risks, says Selby. “They are less open to experimenting. They know what they like and they want to have that.”
Rents in shopping centres are similar to the high-street rents Wahaca pays in its central London locations – Covent Garden, Charlotte Street and South Bank.
“They are relatively expensive, even though you don’t get the late evening trade,” he says. “But the big brands want to be there because they know they will do well.”