Cutting-edge food and design concepts are rapidly infiltrating shopping centres across Australia, with several landlords investing in premium dining and entertainment experiences to try to tap into the millennials’ mindset. So how exactly is our love for eating out changing the face of retail?
The new drug of choice for shopping centre owners
Who doesn’t love eating? It’s undoubtedly one of our favourite things to do – if not the favourite. It changes moods instantly, uplifts us when we are down, and is a great way to socialise and experience the joys of life. Astute shopping centre landlords across the country are rapidly acknowledging the changing climate of retail today and are turning to food and entertainment concepts to keep ahead in the retail game. Ultimately in doing so, they can curb the increasing levels of vacancy (and reduce forthcoming vacancies) that they could encounter in their tenant mixes.
It is no secret that some retailers are doing it tough. Australian household debt is at the highest level on record and one of the highest levels globally, which is in addition to ongoing levels of low wages growth. The balance between consumer spending and disposable income remains difficult. Top retailers and proactive landlords are working together to ensure the retail experience in shopping centres today is vibrant, valuable, and attractive. Customer attraction today is at the centre of every successful shopping centre. No matter what the statistics show about low levels of consumer confidence, many of us place a priority on ensuring enough disposable income for a quality eating experience – heading out with family and friends, and indulging in some of the finest culinary options our cities have to offer, has become Australia’s favourite pastime. We are fortunate enough to have some of the best chefs, cafés and restaurants in the world. After all, what’s another $30 or $50 going to do when you can create a memorable experience with family or friends? And it’s that exact consumer experience and millennial mindset that shopping centre landlords are tapping into, in a creative bid to increase foot traffic levels and ultimately ensure the continued growth of their centres.
So, what does this retail experience look like? A food court is not a new phenomenon. However, the traditional food court as we know it will eventually transform into a premium dining precinct with a “no holds barred” approach that includes world-renowned restaurant brands based on a “build it and they will come” mentality. The larger regional shopping centres are already doing this. I was recently travelling in Los Angeles and visited three major shopping centres. It was a real eye-opener to see what is possible and how retail is changing. Simply put, anything is possible. I also believe that we are only seeing the tip of the iceberg in shopping centre design. The retail shopping experience today is moving to new levels, with the customer at the centre of all tenant mix choices and designs. The Grove shopping centre in LA has a tram route running through the middle of it with a dedicated food market, while Westfield Century City has one of the most captivating food precincts I have seen, with state-of-the-art design and quality food offerings. It’s no wonder that these shopping centres are absolutely bustling with an unmatched vibe to anything I have experienced in Australia. These landlords are enhancing the customer experience through a focused effort on the dining experience, coupled with innovative property design, in the knowledge that it will increase dwell time and ultimately boost retailer sales.
I was recently attending a meeting with a representative of one of Australia’s major listed shopping centre owners. I asked him about his thoughts on the integration of major dedicated food precincts within his centres and his response was, “You can’t fill a whole centre with just food”, to which I questioned, “Why not?” He may have been right, however; in the current climate, everything should be tabled and explored. Ten or so years ago, it would have been impossible to think that any landlord could open a major shopping centre without a Myer or David Jones as its anchor. Fast forward to now and those same landlords are forecasting how they may need to reposition or resize these big boxes that once upon a time played an integral role in their tenancy mix. The truth of the matter is that no one knows exactly what a shopping centre is going to look like in another 10 or 20 years but one thing we can all agree on is that it will be different. The shopping centre landscape is changing at an incredibly rapid rate and landlords must continually evolve new ideas, be creative and, most importantly, be prepared to take a risk.