The globalised nature of the world in which we live is visible in many aspects of our lives. Take a quick scan on Facebook to see how far and wide your friends and family are dispersed across the world, or alternatively just take a stroll down London’s prime retailing high streets, Oxford Street, Regent Street or Bond Street and marvel at the huge variety of nationalities and accents on display.

It is this ability that the West End has to attract international tourists that is of the main contributing factors to its ongoing health and vitality. London’s real estate hosts some of the world’s best cultural attractions, restaurants, hotels, as well as a dynamic retail offering, which includes many flagship stores and the unique luxury retailing destination, London Luxury Quarter. This variety is what makes it the top choice for many domestic and international travellers. And increasingly, it is visitors from outside the EU who are driving this tourist growth. During the months of July, August and September, London attracted a record 4.9 million international visitors. This impressive 19.5% year-on-year increase on the extremely successful Olympic summer highlights London’s status as one of the most popular summer tourist destinations in the world.

The growth of tourist spend in London and in the West End in particular, is one of many topics covered in JLL UK Retail’s new report, ‘London’s West End: Review and Outlook.’ The report explores in detail the current health of the Core West End, and provides a detailed outlook for real estate investors and occupiers situated within the area. The report focusses on the retail and leisure sectors, but also touches on the hotel and office sectors, and provides insight into the key drivers behind the success of the area, as well as some of the challenges to overcome to ensure continued success.

And on this note, the strength of the area also represents one of the key threats. The West End’s prime retail areas must mitigate against over-reliance on tourism, something which is vulnerable to external threats and influences, such as currency fluctuations. So whilst every effort should be made to ensure further growth in tourism numbers and spend, including removing some of the barriers to the key Chinese market, domestic and local visitors must be embraced and encouraged into the area with equal vigour. Think global, but neglect your local shoppers at your peril!

Colin Burnet is a Director in JLL’s European Retail Research team.

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The post London Retail – international tourism boosts prime West End real estate appeared first on European Retail Blog.

Much negative press has been made this week over Marks and Spencer’s (M&S) release of their full year results. The retailer announced their profits dipped 3.9% in the year, but looking into their figures, there are clear signals of hope for the retailer and I am optimistic about their performance going into the future.

This year’s underlying profit before tax has come in much lower than its late nineties heydays at around £623m. However, group sales were up 2.7% driven clearly by good performances in its food, international and multi-channel businesses.

General Merchandise (GM): Total UK Sales 0.0%, LFL UK Sales -1.4%

M&S is in an extremely tough market and has had negative GM LFL sales for the last three years. The retailer has come under attack from value retailers like Primark but also from more fashion forward fleet-of-foot retailers like Zara and Next over the last decade. The majority of M&S’s sales will come through GM, so clearly there needs to be a lot of work done here. Discounting has buoyed sales in some instances but essentially their fashion product is not that exciting. On a quick straw poll of female colleagues and friends, there was a unanimous reaction from the key 18-35 age group saying the retailer was good for basics (underwear, jumpers, work essentials etc) and not much else from a GM perspective.

 Food (Convenience): Total UK Sales 4.2%, LFL UK Sales 1.7%

M&S’s food division is trading very well, in a highly competitive market; in fact it has seen LFL sales growth for the last five consecutive years. M&S have secured stores in key locations including high streets and transport termini and this is supporting their growth. The retailer has also been able to successfully focus on developing top-quality ranges that are competitively priced, including their ‘Dine in for Two’ range.

International: Total Sales 6.2%

In the last few years, the retailer has successfully re-launched across the English Channel, total sales internationally have been positive for the last two years. Our ‘Destination Europe’ report highlights which international retailers have been recently active in their expansion into Europe’s key cities; M&S is most certainly included within this group. The brand in Europe remains strong and the roll out of new stores, franchise or otherwise, in France, the Netherlands, CEE and the Middle East has continued at a good pace and the sales have followed. Whilst international expansion presents many opportunities, great risk and uncertainty remains for retailers.

Multi-Channel: Total Sales 22.8%

Much needed investment in M&S.com has delivered a strong performance in 2013/14, outperforming the market with sales up 22.8% and visits to the site up by 9%. Like many of its competitors, it has seen tremendous growth in this area for the last 5 years. A key component to the retailer’s success in the multi-channel world is its 700 UK store network. The retailer has been able to use the stores to leverage the consumer trend to click-and-collect effectively; with 55% of multi-channel orders now collected in store or ordered in-store for home delivery.
When you look at M&S’s trading statement, you have to appreciate the scale of the investment required to transform the business as well as the retailer’s recent history. Clearly work needs to be done on the retailer’s staple ‘women’s fashion’ but investment internationally, online and in the food offer is already transforming into positive sales for these businesses.

Jonathan Bayfield is an Analyst in JLL’s European Retail Research. He works with his investment and agency colleagues advising international investors and occupiers on their retail real estate strategy across Europe.

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The post UK Retail: Marks and Spencer profits fall as total group sales keep increasing appeared first on European Retail Blog.

It is very easy to be glib about the healthy state of the West End retail market; ‘it’s booming’, ‘just walk down Oxford Street on a Saturday afternoon’. But where is the evidence? It can be found in JLL UK Retail’s report ‘London’s West End: Review and Outlook’. The report explores in detail the current health of the Core West End, and provides a detailed outlook for all businesses situated within the area, and as such is a must read for all with an interest in the area.

London’s Core West End is the embodiment of physical resilience in an increasingly virtual world. Firstly, the Core West End has the scale of offer, with the main shopping streets collectively forming the largest concentration of retail in Europe. It also provides unrivalled breadth of retail offer, and hosts many international retailers’ flagship stores, in addition to the world-renowned London Luxury Quarter, home to two thirds of the world’s top 100 luxury retailers. With the top-class ’beyond retail’ activities such as tourist attractions, dining, galleries and theatre, the experience of shopping in the Core West End is very difficult to replicate.

It is no surprise therefore that demand from retailers and leisure operators in the West End remains extremely healthy. Over the last 12 months, we saw an impressive list of domestic and international retail and leisure operators open in the Core West End. Aquascutum, Cath Kidston, Barbour, River Island, Sunspel, Osprey and Lyle & Scott were amongst the best of British to open new stores, whilst top European and US retailers like Celine, Fendi, Belstaff, Karl Lagerfeld, Tiger of Sweden, G Star and J Crew have all opened flagship stores. Later this year will see the eagerly anticipated openings from the likes of Victoria Beckham (Dover Street), Christopher Kane (Mount Street) and Omega (Oxford Street).  

An increasing demand for space from retailers, coupled with a lack of availability on the traditionally prime streets and record rental levels on Bond, Regent and Oxford Streets, is resulting in a ‘ripple effect’, whereby previously more peripheral streets are becoming retailing destinations in their own right. Strengthening offers on Conduit Street, Dover Street and Duke Street amongst other, are effectively ‘infilling’ the area with quality retail.

Despite continued growth in rents, there appears to be no let-up in interest from retailers. New pitches and a large pipeline of developments and redevelopments should help meet some of the unsated demand. Let the good times keep rolling!

Mark Smith is JLL UK Retail’s Head of Central London Agency. 

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The post The Unstoppable Rise of the West End appeared first on European Retail Blog.

This week we launched our new report, ‘Hospitality and Service: Driving business investments through a thriving luxury destination’, which focuses on the importance of the ‘beyond retail’ offering in The London Luxury Quarter.

The launch took place in the grand surroundings of the Ritz, the symbol of British grandeur. Walking into the foyer I was struck not only by the glamour of a bygone age, but also by the many international visitors that were there. Indeed, this is one of the key focuses of the report: How does the London Luxury Quarter stay traditional and quintessentially British, yet maintain its reputation as a magnet for overseas investment and visitors?

With 18 five star hotels, 31 Michelin starred restaurants and 45 private members clubs this area contains some of the UK’s finest hospitality and service experiences. Our report examines the strong relationships between businesses, hotels, restaurants and retailers situated in some of London’s  most prime real estate. It is these relationships and collaboration that help give the Quarter its unique DNA and often drive innovation. Some examples include Claridges providing hotel guests with the loan of a Burberry trenchcoat for the duration of their stay, and also providing the opportunity for the likes of luxury retail brands such as Dior and Lanvin to produce a Christmas tree for the hotel’s grand entrance.

The report highlights the average spend per visit from Chinese, Qatari and Saudi Arabian visitors is upwards of £1,350. One of the key messages was the importance of ensuring that visitors from China, who have the highest average spend per visit, are aware of all the amenities and services available within the Quarter. Being a second generation, Irish born Chinese I was particularly struck by the comment from Andrew Love, Deputy Chairman of The Ritz Club at the launch. He commented on how some staff at The Ritz London are currently being taught mandarin to make Chinese visitors feel at home, another great example of innovation and adapting to the continually changing market within The Quarter.

The report and the participants at the launch both came to the same conclusions: London Luxury Quarter is great at keeping up to date with changes in the market and is able to offer innovative solutions, which is why it remains the prime location it is. However, changes such as the Crossrail development will draw in affluent consumers from across London and South East, in addition to a wider demographic. For the Quarter to maintain its prime position, investment in the hospitality and service sector needs to be maintained to ensure businesses, retailers and visitors continue to be attracted to this unique area located at the heart of London.

Colin Chan is a Senior Analyst in JLL’s European Retail Research & Consulting team. He is an expert in location and demographic strategy and works with his investment and agency colleagues advising international investors and occupiers on their retail real estate strategy across the UK and Europe.

The post Luxury, innovation and collaboration: the keys to the success of the London Luxury Quarter appeared first on European Retail Blog.

I am thrilled to see that, in the last week, eBay and Argos have announced that they have entered an agreement to extend eBay’s offering of click-and-collect services via Argos’s store portfolio. This extension will enable shoppers like me to choose a much wider range of products from many more eBay sellers for collection at over 600 Argos stores.

This partnership started in late 2013 with a handful of eBay sellers offering a selected range of products for collection in around a third of Argos’s stores. The trial service has clearly proved successful operationally and incredibly popular with customers including myself who have click-and-collected from both retailers at Argos’s Old Street store.

I am not alone in expecting timely fulfilment of online retail orders; busy people are time constrained. This is one of the most important challenges facing the retail industry, which JLL has discussed in its latest global research project entitled Redefining Retail Places.

This extension of the trial illustrates how retailers with physical space potentially have a competitive advantage over pureplay retailers in terms of fulfilment. Credit to eBay who have successfully bolted this on to their offer; expect others to follow suit.

For me, click-and-collect has been revolutionary; I get an email or text when my product has arrived and then can decide over the next week when I want to pick it up from the store. The window of delivery is entirely on my terms and is not dictated by any logistics provider. I can tailor my week’s itinerary around how urgently I need the product and where I am for work and leisure activities.

Retailers with physical space need to respond to eBay and Argos’s innovative moves, and make sure their online delivery options are flexible and convenient in order to compete; they also need to play to their strengths, and maximise the advantages provided by physical store networks.

Feel free to connect with me on LinkedIn or follow me on Twitter.

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Luxury retailing has weathered the recession particularly well; and luxury retailing within Central London’s real estate doubly so. At the forefront of this outperformance is The London Luxury Quarter, which is a magnet for international luxury brands, with more than two thirds of the world’s Top 100 Luxury Brands located within the 57 streets and arcades of The Quarter. However, it is the depth and choice of offer that extends beyond traditional retailing that really distinguishes The Quarter from any other luxury destination in the world, as we explore in our new report, ‘Hospitality & Service: Driving Business Investments through a Thriving Luxury Destination.’ From the world class hotels, to Michelin starred restaurants, to the historic and prestigious private members clubs, The Quarter’s unique DNA is instrumental to its success.
As we explore in our current global research project, ‘Redefining Retail Places’, consumers and visitors to any location not only want to be able to access the ‘latest and greatest’, but they also want to escape and retrench as and when they choose. The ability to choose to ‘opt in’ and participate in the retail experience, or ‘opt out’, has become a key feature of successful places and spaces.

A key aspect of this ability to ‘escape and retrench’ is clearly the restaurant offer within a retail place. Whilst several new restaurants have opened within the LLQ in recent months, including Angela Harnett at St James’s and Simon Rogan’s Fera at Claridge’s, Roka on North Audley Street, there remains latent demand for further quality restaurant space from visitors and businesses alike within the LLQ. In fact there is an under provision of food and beverage space within Mayfair generally. A relaxation in property planning regulations, expediting change of use to A3 would help ease the tension, albeit there is also a challenge across the Quarter around ownership. Whilst the LLQ landlords such as The Crown Estate and Grosvenor readily acknowledge the huge importance of strong food and beverage offer on their estates, individual landlords will invariably strive to extract the best rent for a property, which will typically be from a retail use rather than a restaurant.

So while it is clear that the LLQ is thriving, and remains a powerful magnet for all types of visitors, be they tourists, shoppers, businesses, investors or residents, it is vital that the balance between different uses and users be continually and subtly improved, in order for The Quarter to remain a compelling and sought after destination.

Mark Smith is JLL UK Retail’s Head of Central London Agency. 

Connect with Mark on LinkedIn

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The post ‘Beyond Retail’: London Luxury Quarter outperforms appeared first on European Retail Blog.

Extract from JLL’s Redefining Retail Places

In our blog, ‘Urbanisation: 6.3 billion living in cities by 2050 – implications for Retail’, we discuss the impact of the powerful demographic forces that are at work on a global level, and how urbanisation and population growth are reshaping the Global Retail landscape, and leading to exponential growth in our cities globally.

Emergence of mega cities…

In Europe, we have seen massive urbanisation in parts of eastern Europe; Istanbul has grown from a city of 1 million in 1960 to over 13 million today. This is leading to emerging mega cities that will suck in spending and investment in the years to come. In Western Europe, while growth rates may not be so spectacular within our mature, established cities, urbanisation is still very much in evidence.

European capital cities generally growing faster than countries…

A quick analysis of population growth forecasts of the European capital cities in comparison to the country level forecasts graphically illustrates the urbanisation trend. Of the major European capitals, only Dublin and Paris are forecast to see population growth below the overall country level of growth to 2025. Elsewhere, the differential is often stark, particularly in the Nordic countries, where Helsinki, Copenhagen, and Stockholm  ‘outperform’ the national population growth forecasts by 7.2%, 6.4% and 5.1% respectively in the next decade. In parts of Eastern Europe, where country level population declines are forecast due to slowing birth rates and emigration, the capital cities Prague, Moscow, Warsaw and Sofia are actually forecasting population growth.

Source: Oxford Economics

Urban spaces becoming more efficient and creative…

So, whilst on the whole, Europe will not see the spectacular rates of population growth and urbanisation witnessed in the less developed world we will still see rising demand for city living, which is forcing us to be more efficient and creative in how we use urban spaces. The urbanisation effect is already evident in some of Europe’s major cities, as urban renewal projects lift and regenerate previously disregarded pockets of the landscape. And while existing space in major cities will adapt through reinvention, new urban villages are emerging, providing local residents with their residential, retail, leisure, convenience and entertainment needs. We expect this trend to gather pace in the coming years, in response to a greater demand for space and accessible services and amenities within our cities.

Further information on Urbanisation and Redefining Retail Places

Redefining Retail Places: for further information on trends influencing the retail landscape

Global: Discover how urbanisation and population growth are influencing retail real estate at a Global level

Or visit the JLL Global City Research Centre here

Asia Pacific: Discover how urbanisation and population growth are influencing retail real estate in Asia Pacific

Colin Burnet is a Director in JLL’s European Retail Research team.

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I love living and working in London and truly believe that it is the world’s ultimate retail destination. In fact, London’s attractiveness to the world’s top international retailers has been well documented in Destination Europe 2015.

It is therefore, no surprise that the ICSC has chosen London to host it’s 40^th European Conference here this week. The conference will focus on ‘Destination Retail’ and how important it is for retail places to provide entertainment, experience and become ‘destinations’ that customers want to spend time in.

And London certainly captures this idea, as detailed in JLL’s London Retail City Profile. There are so many retail spaces throughout the city that combine entertainment with retail, whether it be Kingly Court’s bars and restaurants alongside the independent boutiques in Carnaby, or the mix of theatres and international retailers in Seven Dials, or the famous luxury shops on Bond Street.

The West End alone attracted 390 million visitors and contributed £51.25bn to the UK economy last year!

Not just about the West End

If you get bored of the West End then you have two World Class shopping centres in the form of Westfield London and Westfield Stratford which are easily reached from central London and are home to some of the latest British and international brands.

• 58 trains per hour stop at Stratford’s railway stations
• 80% of shops specialise in fashion at Westfield London
• Westfield Stratford is Europe’s largest urban shopping and leisure destination

High Street retail – the future?

Despite there being much media attention about the decline of high streets in the wake of the rise in online shopping, looking around the busy streets of the West End it’s easy to see that this isn’t the case! As discussed in JLL’s Redefining Retail Places project, retail places should look to future proof themselves by embedding key resilience attributes.

London’s West End is the personification of physical resilience in an increasingly virtual world. First, it has immense scale of offer, with the main shopping streets together forming the largest concentration of retail in Europe. It also delivers unrivalled breadth of retail offer; hosting over 250 international retailers’ flagship stores as well as the unique and world- famous London Luxury Quarter.

With the first-class ’beyond retail’ activities such as tourist attractions, dining, galleries and theatre, the experience of shopping in the West End is very demanding to replicate elsewhere. It is therefore, no surprise that in the last 12 months, over 80 national and international retail and leisure operators opened new stores in the West End alone!

One of my personal favourite new openings in London is Finisterre, a specialist cold water surf clothing company. It is a really great, award winning brand that supports local manufacturers and adds to the diversity of London’s retail offering.

Retail Destination – Seven Dials

The growing demand from retailers, coupled with a lack of availability and record rental levels on traditionally prime streets, is resulting in a ‘ripple effect’ where streets previously thought of as peripheral, are actually becoming retailing destinations in their own right!

Seven Dials is one example of this. The eclectic mix of shops, restaurants and entertainment create a village feel in the centre of London. Seven Dials has created an identity for itself and draws on the culture and heritage area, two attributes discussed in Redefining Retail Places, would recommend anyone visiting the city to have a look!

I’m very much looking forward to welcoming colleagues, retailers, investors and developers from around the world to London at the ICSC Retail Connections Conference next week and hope everyone enjoys their time here!

Lucie Penn is a Marketing Executive for the European Retail Team and works closely with the ICSC as part JLL’s ICSC European Partnership.

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Fresh from two days of innovation and insight at ICSC European Conference in London, Shelley Matthews, European Retail Capital Markets, JLL, explains why the future of retail is all about ‘place making’.

In the UK, there are more farmers’ markets opening than branches of Tesco, it’s indicative of the multi-sensory shopping phenomenon that is currently sweeping Europe and it was a dominant theme at ICSC Europe.

Despite the undisputed rise of eCommerce, the message is clear: people want to shop in a physicalenvironment. But, more than that, they want this environment to be entertaining and even educational. This is a topic that JLL has been discussing as part of our Redefining Retail Places research project.

The retail experience

At ICSC’s European Conference, the retail community sought to better understand how their own offering could adapt to cater to this new demand for ‘experiential’ retail.

“Somewhere along the way we lost the experience of retailing in the quest for the transaction,”

said Ross Bailey of Appear Here – an online market place for pop-up shops. He spoke about the future of retail being more than bricks and mortar and said people want to ‘learn, play and share’.

Making retail places

In agreement was Beverley Churchill, Creative Director at Capco. When talking about London’s Covent Garden she said,

“people make places.”

It’s a good case in point: until recently, Londoners had turned their back on Covent Garden, the central London enclave of shops, restaurants and residential, which is peppered with street entertainers. It was typically seen as a tourist hotspot but, today, 50 percent of visitors to Covent Garden are now locals as more people go in search of authentic retail experiences.

Creating an environment that people want to visit is paramount. Today’s shoppers want to meet for great food, conversation and experiences.

In a mall, this could mean making use of previously unlettable space, such as basements or roof space, for entertainment concepts such as theatres, aquariums or even theme parks. But in compact areas such as Covent Garden, this means being creative with space. The buildings may be 400 years old, yet they still serve today’s retailers and consumers.

Some of the best examples of creative retail space come in the form of pop-up shops. Designed to attract footfall over a period of, say, two days to three months, these spaces are designed to create memories, rather than simply sell ‘stuff’.

Reverting to medieval market square style retail concepts may seem counterintuitive in a digital age, but there are great examples of these working hand in hand.  De 9 Straatjes in Amsterdam, the 400 year old UNESCO Heritage listed Canal Belt district is marketed as a ‘21st Century village’ and it illustrates how a high street can combine multiple concepts into a single, branded identity, to become much more than the sum of its parts. The strong marketing strategy behind  De 9 Straatjes is complemented by a transactional website, enabling online shoppers to buy from any of the stores on one single platform – a model for the future of high street retail.

As Ross Bailey said,

“the internet could save the high street”.

Find out more the future role of the brick-and-mortar space against the backdrop of a new and constantly changing virtual world through JLL’s Redefining Retail Places research.

Find out more about De 9 Straatjes in JLL’s Amsterdam retail city profile. 

The post Why multi-sensory shopping could save the high street appeared first on European Retail Blog.

Jeremy Eddy, European Retail Capital Markets, JLL, talks transaction volumes, trophy deals and retail trends after a successful first half of 2015, which puts the firm on track for a record-breaking year in European retail.

The post Breaking retail records in Europe appeared first on European Retail Blog.

I’ve been at the IHIF, in Berlin today. I am here for the duration, enjoying the buzz of The International Hotel investment Forum. Lots of suits, lots of stands and lots and lots of serious people.

Our company, has a brilliant Hotels and Hospitality business which we are all rightly very proud of. They are the market leaders in the business of buying and selling assets, transacting and negotiating, valuing and financing and many other areas of the Hotel and Lodging industry. They are some of the most impressive people we deal with and we enjoy our relationship with them.

As the Foodservice Consulting business in JLL, we also joined our H&H team in Berlin this year, to support, to learn and to understand what the industry is doing, how it is preparing for the changes that are occurring and how ready and willing it is to embrace what is about to happen. I was surprised at how peaceful it is, given the Tsunami of change that is going to sweep through the hotel industry shortly.

I make no apologies for the title of this article, as I have spoken about, reported on and commented regularly on the changes we are now seeing. I like to think we have helped lead some of these. First of all, let’s just look at the definition of the work “Flair”

It means:

1:  a skill or ability to make good use of something

2:  a uniquely attractive quality

And so the phrase, “FlairFnB” was created (by me), but the world has yet to understand its significance. Yes, it has a striking resemblance to airbnb, and in many ways is having the same impact on the Hotels and Lodging industry. That is deliberate on my part, in the name.

As a consultancy, we have got busy in hotels, and in many cases it is because the investors, operators and owners cannot and will not accept poor Food and Beverage performance any more. They want returns, results and performance. But they aren’t important. Honestly, if you are doing it for them, then you are largely missing the point. The really important people are the guests, the ones with the money, the time and the inclination to enjoy themselves. They are the ones that are increasingly seeking out the “Flair” in the food and beverage offers of hotels. No Flair, No Fun, No Funds!

Hotel guests used to accept what they were given, because there was no choice, no local competition, no internet, no means of finding out what was great in the city, except through the Concierge, who offered a slightly biased view of the locality, if you were lucky, or directed you to the shabby and expensive, for an appropriate consideration.

Now travellers cross the globe as food tourists, they know more about the offerings locally then the Hotel food and beverage department, who sadly still don’t “get out much” and they are armed with every internet enabled device under the sun to find those great places, OUTSIDE the hotel. Buffet or “blown away” – your choice. Keeping the guest in the hotel when there is so much competition is increasingly difficult, challenging and disconcerting. But there is a ray of hope that is “FlairFnB”.

For those hotel operators that can make good use of what they have got, or make their offer uniquely attractive, they are onto a winner. This doesn’t mean only expensive, exclusive or Michelin, it can mean social, affordable and desirable, but it takes a whole lot more thinking and execution to get it right.

“FlairFnB” means you know who your guest is and you give them what they want, you play to your strengths, your attractive qualities and your “brand personality”, not just place the same old foodservice offering in the same location, with the same results time and time again.

Depending on who you talk to in the industry at this time, from the giants to the upstarts, you will get a different perspective, but they are all aligned on one thing, foodservice is changing and F&B in hotels is never going back to where it came from. We love history, we adore recalling our past and our experiences and we also easily forget. Our guests of today, especially the Millennials, starkly remind us daily about our propositions and roundly scold us when we get it wrong.

Those companies with an eye towards innovation, to change and to offering the market their “unique qualities” are now common place. 25hours Hotels, Mama Shelter, Moxy, Mi Hotel and many more, from the large groups to the smaller start-ups could turn some of the challenges into opportunities in the coming year, by showcasing their uniquely attractive qualities. Changes in the economy around the world,  constantly “always on” innovation, and more complex consumer demands have changed and adjusted the travel landscape, and this is not going to stop.

Hoteliers must sustain growth and more importantly revenue growth, and “added value” as online private accommodation aggregators spread across the marketplace with new locations, rooms and offers. Hotels can fight back, but they have to provide so much more than just food and beverage, they need “FlairFnB”, put another way “places for People”.

Ultimately, businesses are driven by customer demand. But customers’ values, preferences, and expectations are not fixed, nor are they universal. We call them guests, because to call them customers or consumers in the “experience” world that we now live in is ludicrous. They no longer transact, they “enjoy”, they don’t “buy” they “immerse”. As a result they seek out, want, desire and demand (and expect) a personalized experience tailored to meet their needs. This has many travel brands excited, all aspiring to meet the high expectations set by others who are giving guests what they want. Some will succeed, many will fail.

Guests want authenticity, personalization, ease of use and understanding, on-demand functionality, familiarisation and style like never before. Tech is important, but “easy-tech” is essential. No long logins, no complex lighting, no stumbling round the room in the dark, just a quick “browse and begin” approach.

The rapid growth of industry disruptors in hotels and lodging and in foodservice generally is encouraging companies to capitalize on products and offers that would normally be outside of their traditional offerings. Cool bars, great lounges, open area receptions and foodservice offers that truly differentiate are all signs of “FlairFnB”.

Creating great places to enjoy, work and meet, brilliant public spaces in hotels and customized food and drink locations and products is where the smart money is going in my view. The guests are already at your property and some of them have even booked because of your Flair, rather than your lack of it.

The travel and hotel industry along with retail and restaurants is likely to see a very high level of collaborative activity in 2017, as we all begin to understand who best to work with, to finally make good use of what we have got, and to demonstrate our uniqueness.

Flair, it would appear, is here to stay. Good, I say.

The post FlairFnB – The Next Best Thing in Hotels appeared first on European Retail Blog.

The continued rise of Food Halls is something we are monitoring across the world. In Europe, the concept is renowned for places such as Mercado di Ribeiro (Lisbon), Markthal (Rotterdam), Eataly (Milan) and Mathallen (Oslo) to name a few. In the US, the rise of the Food Hall concept is all over the press at the moment, so much so that after almost 120 years the famous Katz Deli has only just launched its second unit inside Brooklyn’s DeKalb Market Hall.

Whilst the debate continues as to whether a Food Hall is the same as Food Court, there are notable differences between the two. Firstly, a Food Court is usually located within a Shopping Centre, with a space surrounded by well-known fast food operators and a mass of seating options. Secondly, by reducing the concept down to the basics, from our research and findings across the world a Food Hall usually has a much higher element of authenticity, an anti-brand ethos and independence. It is not restricted to a Shopping Centre location and can feature additional elements, such as Leisure, Offices and Residential components.

For the residents of North London, a brand new Food Hall opened it’s doors this July, promising to showcase the very best in authentic, Asian cuisine. Bang Bang Oriental, designed by Stiff + Trevillion is set to be an eco-friendly hotspot, bringing together 32 operators showcasing Malaysian, Chinese, Korean, Vietnamese, Indian, Japanese and Taiwanese foods across 32,000 ft² of space. The space, which had previously been a hub for the Oriental community, aims to expand on this history and hopes to attract a new crowd of footfall that will put the Food Hall on the map for the Oriental community in London, for many years to come.

The design echo’s the feel of a bustling Asian street food market, with an Oriental soundtrack being played across the Hall, as well as seats for 450 diners in an array of different configurations. There’s more to this Food Hall than just foodservice, with a massage parlour, herbal medicine shop plus a nail and beauty salon on the mezzanine floor. In keeping with the local community, the opportunity to learn the traditional Chinese Lion dance is available in one of the community spaces, as well as a 300 seat restaurant situated on the ground floor level.

So given that I visited on opening day, how was it? Well let’s begin with the positives. I did feel as though I had been transformed out from London and into an Oriental food market, with popular choices including dim sum, bubble tea and roast duck. The range of different food available was overwhelming, in a good way, as it meant that various visits to the Food Hall would allow you to try something different each time. There was definitely a good vibe in the hall, with families, groups and individuals of all ages enjoying the various different operator outlets and importantly, the food was authentic in taste, being made-to-order.

However, with all new openings there are teething problems. Whilst I visited after lunch, in the early evening before dinner, lots of tables remained unclear and had used plates, trays and cutlery on them. Whilst the furniture was functional, it was not appealing, which can also be said for the actual units themselves. One of the biggest disappointments, given that we are now in a digital age is that only 2 of the operators offered card payment services. This was a little disappointing as it meant I could not try a variety of different dishes. In a Food Hall environment, contactless payment would not only make the guest experience easier, but it would also eliminate queues and speed up service times.

I do fully expect Bang Bang Oriental to address these issues as it grows, learns and becomes an iconic Asian destination in London. Especially seeing as the growth of Food Halls are on the rise and guests are beginning to not only understand these concepts, but desire destinations like Food Hall that provide a real point of difference, authenticity and experience. It is these factors, plus the uniqueness of the concept that is a big attraction for guests, as they aim to escape from their everyday lives and become immersed in a new world, surrounded by enticing smells, sensational aromas and thriving atmospheres all around food.

If you live nearby, or want to visit a unique environment which you won’t find anywhere else in London, I would highly recommend you give Bang Bang Oriental a chance. Remember that it is new, bear in mind that there will be learnings and challenges for the owners, but imagine the potential that this Food Hall has for shaping the future of the Oriental foodservice scene in the market.

Landlords, developers and investors take note, Food Halls are here and they are the ‘now’, get creative and give people new authentic experiences that they can enjoy, love and want to return back to.

The post The Growth of the Food Hall Continues with Bang Bang Oriental appeared first on European Retail Blog.

I was recently at Euston Station in London, waiting for my train to take me to REVO in Liverpool. As usual, I’d given myself a bit of ‘wiggle’ room to allow for any travel disruptions so had a good hour of free time to have a look around. At the main entrance, unit hoardings announced the imminent opening of Paul Hollywood’s first ‘High Street’ venture with the brilliantly named ‘Knead’ concept, offering coffee and, of course, a host of bakery goods. Buoyed by the celebrity status afforded by The Great British Bake Off, even with the recent switch from primetime TV to a Channel 5 slot, Select Service Partner clinched a deal with Paul to develop ‘Knead’, ahead of a national roll out in major transport hubs.

Hollywood is indeed now a household name and, with his face on the unit hoardings, gives users a reassuring ‘quality stamp’ of what to expect. Venturing further into the Station, located on the food balcony, more celebrity offerings in the form of Gino D’Acampo’s My Restaurant, combining All Day Dining with food retail from the deli and a good splattering of Gino’s Cook Books.

Of course, Restaurant brands carrying the celebrity brand name are not unusual and indeed have been around since food, fun and theatre really came alive on our TV screens. Jamie Oliver’s meteoric rise to fame came courtesy of his casual, cheeky and quirky TV appearances, before the equally meteoric growth of Jamie’s Italian. The global appeal and reach of his cookery shows and countless recipe books meant that ‘exporting’ the brand to the 20+ countries it now operates in, was a much easier ‘sell’ than that of a ‘traditional’ Restaurant chain.

Before Oliver had even hit the TV screens, Antonio Carluccio opened the first ‘Carluccio’s’ in 1999, setting the scene for the combination Restaurant/ Deli concept which soon scaled up across the UK. Again, backed by TV appearances and bestselling books, the positive brand associations with Antonio’s ‘homely’ persona made Carluccio’s top of every Shopping Centre and High Street’s wish list. The list goes on with Brasserie Blanc, Marco Pierre White’s Steakhouse, Bar & Grill, Rick Stein, Ottolenghi, Wolfgang Puck, etc, etc. The link between all these brands is that the small screen was the boost that put them front and centre of people’s living rooms, selling the lifestyle and dreams of new cuisines, new methods and new ingredients. Subsequent recipe books flew of the shelves as viewers wanted to recreate the on screen delights at home and led to events such as ‘The Bake Off’ effect with unprecedented spikes in the sales of Paul Hollywood cookie cutters, cake stands and spatulas.

There is an undeniable link between on screen persona and people’s acceptance and subsequent ‘buy in’ of celebrity branded Restaurant chains, not just in the UK, but around the Globe. Of course, there will come a point where these celebrities gradually disappear from our screens, cease to author recipe books and become less relevant on the High Street, but they will be replaced by the next batch of ‘new kids on the block’, keen and eager to roll out their concepts on the back of media platforms.

The post The Power of the Celebrity Brand Name appeared first on European Retail Blog.

It has been a great couple of days talking to some of our existing Clients, colleagues, friends and meeting new ones as well. It did however mean that I had to wait till late on Thursday afternoon to complete the article as I wanted to share with you some of the opinions from the panel on the Bon Apetit: Advantage Food panel.

Whilst this was a bit of a risk, as the session could have been one of those Conference yawn fests, I was pretty confident of some interesting opinions. Having helped compile the panel and also knowing that it contained two of my ex JLL Foodservice Colleagues, I knew that we would be getting both an interesting insight and some potentially lively debate.

For over 20 years the team here at JLL Foodservice Consulting have been banging the drum for “more food” and for “more prominent food” in Shopping Centres because we knew that food at the time was under-represented and more often than not “hidden”. However, sometime in the middle of last year we sat down as a team and discussed this, we recognised that there was a perfect storm brewing, with decreasing demand for physical retail space combined with growing investor (over?) confidence in F&B we were seeing foodservice being used to plug gaps, the wrong brands in the wrong places at the wrong times – paying very much the wrong rents. We knew that we had to help our Clients focus on providing the “right food”.

This theme was touched upon by all of the panellists and was summarised very nicely by Daniel Cerqueira da Rocha (Head of Foodservice Leasing) for Unibail-Rodamco in Germany with his statement that “foodservice is not a magic pill” and perhaps even more clearly by Fabian Rieden, SIGNA Food & Restaurant who said unequivocally that landlords should “not just add more restaurants”.

This need to take a strategic approach to food was one of the critical findings from JLL’s recent ICSC F&B Study into Shopping Centre foodservice and was stressed further by Jonathan Doughty of ECE who asked “who cares about how much food, we cannot treat all assets the same, there is a need to bespoke your foodservice offer”. Another key finding of the report was that there is a halo effect from foodservice, whilst it can be difficult to measure in isolation, there was unanimous agreement from the Landlords that we spoke to that a strong foodservice offer drives wider spend on retail, or as Doughty put it “for every minute more that someone spends with us, hopefully they will spend some cash”.

As foodservice people, the Team here at JLL Foodservice Consulting have long recognised the value of hospitality, in our early years when we were working in restaurants and hotels we would see first-hand the joy and emotion that great food, service and spaces bring to people. It is this joy that we in the property industry now need to tap into, to become great at delivering. As the different avenues for simple purchasing of products, and of things becomes quicker, easier and even automated, the property world, and particularly the retail world need to recognise that creating “places for people” is critical. We need to create spaces that people want to spend time in. This will include foodservice spaces, but equally (don’t shoot me here) non-commercial, non rentalised spaces where people can spend their time, relax and enjoy themselves will become invaluable. This is because if people spend time somewhere, and we as a collective create the right spaces for those moments of joy then they will, ultimately also spend money there.

The post Bon Apetit:Advantage Food appeared first on European Retail Blog.

Article originally published by MCA.

When restaurants are hit with rising food costs, staff wages, business rates and rents, resentment towards landlords inevitably rises. Restaurant businesses need a break, and have few other places to look – the economics of international supply chains are too nebulous to influence, it is hard to begrudge employees a small pay rise against the backdrop of rising living costs and the weakened pound, and everyone is tired of grumbling about politicians. As a round of rent reviews are the last straw for a number of eateries, the stereotype of the greedy landlord returns.

What is often forgotten is that commercial property companies, just like restaurant chains, are under pressure to deliver growth for shareholders. It is not simply a case of lining their pockets every time a rent review comes around, they need to hit targets like any other business. The pressure is mounting in the property world too – if the eating out market has reached saturation, who will fill this new swathe of vacancies? And how will they counter challenging valuation deficits? Many of the major players such as Land Securities and British Land have reported accounting returns below the level of inflation for 2017, compared with c.14% in 2016 – a pattern that mirrors the P&Ls of many restaurant chains right now. Whilst they aren’t exactly going out of business any time soon, they are likely to be feeling restaurants’ pain.

The situation has been created by several factors, including aggressive demand from restaurant chains themselves, often bidding each other up to secure a ‘top’ site. It takes a lot of justification and foresight for a landlord not to take the highest bidder. There should be a mutual responsibility between landlords and tenants to do their due diligence on whether rent-levels are sustainable, and to stress-test revenue and EBITDA projections. That is something we specifically model for new developments or restaurants that we work with, but all too often, this step is skipped or overlooked, leading to closures that are costly and painful for restaurants and landlords alike.

Establishing rent levels is where the problem often begins, but once rent reviews come around, there are other factors at play, such as maintaining rental levels that are fair to all tenants. If a restaurant is struggling and the landlord reduces the rent by a significant amount, is it fair for the successful café next door to pay more? In addition, when other rents are set according to comparables in the area, any reduction sets an unwelcome precedent for the next set of renewals. Maintaining and increasing asset value is one of the key performance drivers for the property industry. This is what makes rent renegotiations so difficult.

A long term Client of ours recently undertook a round of reviews where, as well as using comparable evidence (some which had levels just north of £100 per ft2), they also took into consideration (with the intelligence provided by the JLL Foodservice Team) P&L sense checks to ensure sustainability. As a result, the Landlord pitched the rent reviews at a lower (but, critically, affordable) level to ensure they didn’t “kill the golden goose”. They still achieved big increases but have ensured that tenants are still reaping decent contributions from their units. The ability to do this accurately stems largely from the tool kit of median rent reviews, and transparency on tenant turnovers, which in part was put down to the legacy of our involvement when the scheme was set up over 20 years ago.

This challenge is reflected in other areas as well, such as building a development around what the consumer wants. Retail leaders recognise the demand for variety and change, and can see the intrinsic attraction of pop-up units and rotating tenants. However, given the nature of these offers, they provide little direct asset value. Our clients also recognise the value of the “halo” that a strong set of restaurants can deliver in terms of driving footfall, dwell times, spend and, where applicable, residential value, but attributing a finite sum to this is very difficult. The most forward thinking developers are likely to be the ones that succeed. We have seen this work very well with Trinity Kitchen, for example, which was the first development of its kind in a UK shopping centre. The rental model was entirely different, and in many ways, higher risk, but the benefits in centre footfall and brand perceptions speak for themselves. Similarly, what Shaftesbury did with Kingly Court in Soho took considerable vision and gave them the flexibility to work with more experimental, socially responsible and original brands – a strategy that has done them a lot of favours, both financial and reputational.

As the retail and restaurant property landscape rapidly shifts, landlords and tenants will find a better balance. At the end of the day, it is in both parties’ interest for consumers to eat out more, which means establishing a rent level than enables restaurants to charge ‘affordable’ prices. In the short-term, we foresee a healthy turnover of tired concepts as the property market holds out, and then a boom of innovation as a new wave of brands swoop into vacated, rent-adjusted units. Timing may well be everything.

The post In Defence of Landlords appeared first on European Retail Blog.

What a year! A quick, end of year, flick through notebooks, meeting minutes and diary entries, summarises what an extraordinary year it’s been across the foodservice market in the UK.

Another year of market growth in the out of home eating sector, with sales nudging £90 billion and forecast to continue to rise to £94 billion by 2021, even with Brexit looming (or not, as the case may, or may not, be!) But a shift in the make-up of sales with the Breakfast and Snacking sectors growing in importance, to the detriment of the traditional Lunch and Dinner sectors – further proof that we are increasingly becoming a nation of ‘grazers’ – informal, spontaneous and much less about ‘traditional’ eating times.

We ate out less each month now than 5 years ago, but spent more on each occasion IF there was added value – simple nourishment just didn’t cut it anymore.

The move to increased foodservice (and leisure space) in commercial premises continued to grow, shaping enhanced guest spend, dwell time and experience. All good so far? What could possibly go wrong?…

Well, quite a lot actually! There were CVAs galore in 2018 amongst the National branded Restaurant sector, with the likes of Handmade Burger Co., Gaucho/ CAU, Byron, Carluccio’s and Gourmet Burger Kitchen suffering as a result of over expansion, a perfect storm of increased food costs, rents, rates, transportation and minimum wage increases. Even the ‘national treasure’ of Jamie Oliver was not immune to the wave of unit closures. In their place (and in some cases their actual stores), Fast Casual continued to be the darling of the sector, with a wave of better burger/ fried chicken/ pizza/ tacos operators benefitting from a more ‘bang for your buck’ selling price, a more ‘Generation Z’ unit design and an equally important social media approach that resonated well with the millennial market. In tandem, local heroes began to claw back market share in the regions, providing the points of difference and ‘anti-brand’ identity that their communities demanded.

Which leads me neatly onto Food Halls and, oh my word, what a difference a year makes. Hot on the heels of the success of Altrincham Market, a second branch in the portfolio, Mackie Mayor, opened in Manchester. Try Markets opened at Fulham Broadway Station followed by a second, larger market in Victoria in the former Pacha nightclub. Kerb announced plans for its first indoor Food Hall in 22,000 ft² of former banana warehouse in Seven Dials. And if the year couldn’t end on more of a high note, the ‘granddaddy’ of them all – Time Out Markets, secured a 32,000 ft² site in Waterloo with an expected opening date of 2021.

Further disruption to the ‘traditional’ foodservice landscape came from the food delivery aggregators – Deliveroo, Uber Eats and Just Eat, with the former 2 players still locked in early discussions about a buyout. Deliveroo reached 17,000 UK restaurant partners and delivered an astonishing 25,000 Pizza Express pizzas each week. Not to be outdone, Just Eat recorded the busiest day in the company’s history, taking orders for 1.5 million meals in the last weekend of November. Dark kitchens continued to appear in secondary, low rent and low rate spaces, but within striking distance of their catchments. The delivery sector reached estimated sales of £8.1 billion in 2018 – a real disruptor to both the eating out market and the ‘cook at home’ market. Perhaps in recognition of this, Asda expanded its trial of a pizza delivery service in partnership with Just Eat, whilst at the other end of the scale, Sainsbury’s launched its first Food Court in its recently opened Selly Oak Shopping Park.

The Restaurant Group’s (TRG) shareholders voted in favour of moving ahead with the £357m takeover of Wagamama, giving the group an instant 133 restaurants in the UK, 5 in the US, as well as 58 franchised restaurants across Europe, the Middle East and New Zealand. A hefty price tag, but not as high as the proposed £3.9bn Costa sale to Coca-Cola which has received approval from the Chinese regulator, but still requires clearance from the European Union under the EC Merger Regulation before the transaction can complete.

In response to the growing impact of online, fashion retailers continued to develop their ‘experience’ stores, with foodservice very much an integral part of this. Next cemented partnerships with Gino d’ACampo with a new pizza restaurant, coffee shop and prosecco bar in its Manchester store, Jack Wills’ Espresso Hut opened in Soho, not far from Farm Girl above Sweaty Betty. H&M opened the first ‘It’s Pleat’ instore offer outside of Sweden with a promise of ‘healthyish food’ in the new extension of Westfield London (which by the way attracted a record 50 million visitors in 2018 – who said ‘retail is dead’)?

And last, but by no means least, a plethora of ‘competitive socialising’ experience concepts opened, ranging from miniature golf to darts, ping pong to axe throwing! These all had ‘experience’ at the heart of them, overarching the Street Food, Cocktails and DJ’s that were central to the offers.

Quite a year I think you’d agree and a sure fire sign of the times that the foodservice market never stands still. It is perhaps the most dynamic I’ve ever known it and I personally cannot wait to see what 2019 has in store.

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