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Shopping centres are losing money because of fast food

15 September 2005

Shopping centres are losing cash because of their poor mix of catering outlets, according to a report by property consultancy CB Richard Ellis.

The national study found that older shoppers were turned off by the prevailing fast-food and casual dining offer aimed at the youth market.

While 40% of people buy meals or snacks when shopping (double the level in the 1980s), 65% of adults who ate fast food did so only because they were accompanied by a child.

"Older consumer groups are now driving change in catering markets," said CB Richard Ellis senior director Catherine Lambert, who believes developers could do more to meet the market's requirements.

"Shopping centre owners relying on ‘cheap and cheerful' fast-food-focused catering risk alienating increasing numbers of customers," Lambert added.

The report blamed a short-sighted approach by landlords, claiming that while the retail mix was carefully analysed, catering was treated as a low-rent afterthought.

Food service consultant Jonathan Doughty agreed and blamed the property industry for looking to make a fast buck. "Operations with the highest turnover are those that pay the highest rent," he said. "That's why the offer in shopping centres has traditionally been dominated by fast-food palaces."

But an increased awareness of healthy eating among the 40-plus generation may force landlords to think again. "Anxieties over obesity trends reveal a sharp and growing divide between the eating preferences of the old and young," the report said. "As the baby-boomer generation take purchasing power with them into old age, a change in shopping-related catering is inevitable."

Doughty agreed: "There is no fast-food court currently under development in the UK. It's not just a question of healthier alternatives but of meeting demand. Shopping centres must mirror the high street where there is an ever wider range of options."

He believes landlords will benefit financially as a result. "The longer people stay in shopping centres the more they spend. Landlords are beginning to realise that more flexible dining options increase dwell-time, improve loyalty and ultimately boost retail spend.

By Tom Bill

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