Malls and hunger are a recipe for success

SSP in the News 4-April-2009

Frugal Britons might no longer be splashing out so much on clothing, furniture or other big-ticket items when they hit the country's shopping centres. But few are letting the economic troubles get in the way of their stomachs.

Even as retailers bemoan the effect of a thriftier public, food court operators are reporting steady and, in some cases, booming trade.

Harry Ramsden, the fish and chip shop chain, for example, has seen like-for-like sales at its 15 or so mall concessions increase 8 per cent over the past six months, even as its stand-alone restaurants suffered from more lacklustre sales.

"There is definitely an element of trading down," says Chris Sullivan, managing director. "But there is also an element of treat. People who . . . spend the day at the mall might hesitate to spend 80 on a new dress, but a portion of fish and chips remains a relatively inexpensive indulgence."

It is not hard to see his point. On a recent weekday morning at Bluewater Shopping Centre on Kent's border with London, when the mall's stores were still largely void of customers, the food court was already beginning to buzz with activity. At the Harry Ramsden kiosk, one of about a dozen vendors in the mall's food court, a line several people deep had already formed.

Business was equally brisk at the nearby Spudulike baked potato chain and Burger King.

The scene is typical of that to be found in food courts in major shopping centres across the country, says Graeme Cormack, a retail property consultant at Experian.

While footfall at shopping centres is falling, he says those that do go tend to linger longer and are spending more money on food.

Trevor Pereira, commercial director of Capital Shopping Centres, a subsidiary of Liberty International, says he has been seeing "very positive trends" coming out of the food and beverage units at its malls.

Food sales at Lakeside Shopping Centre in Essex were up about 5 per cent during the first three months of the year.

The increase is higher than the growth seen during the same period last year and compares favourably with the retail side of things - where the picture is more mixed.

None of this surprises Jonathan Doughty, managing director of Coverpoint, a retail and catering consultancy. He says overall like-for-like food sales at UK "destination malls" have risen between 8 to 12 per cent over the past year.

"Twelve months ago, sales growth in food courts were more or less static," he says. "What has happened in the last nine months is that as the economy has gone south, shopping centres are getting a larger portion of the market share for food spend."

The reasons are simple, he says. "You have a captive audience. People come to the mall with a predisposition to spend. They might not be spending it in the shops at the moment, but they'll spend it on lunch and a cup of coffee."

By contrast restaurants on the high street face more competition and more passing traffic.

For Harry Ramsden, business at its mall outlets has seen such growth that the group is looking to open more units, specifically in shopping centres.

It is not alone in targeting shopping centres. Yo Sushi, the conveyor-belt restaurant chain, is planning to open nine new restaurants this year.

All of them will be in shopping centres. Its unit in the Westfield shopping centre in west London is among the top grossing of the group's 38 UK restaurants.

Stephen Wall, founder of Pho, an up-and-coming chain of Vietnamese noodle shops, says turnover at the group's newly opened unit at Westfield now exceeds those generated by the group's two other restaurants in London.

"Restaurants tend to be slow burners," he says. "It takes time for a restaurant to build up a reputation and following. One of the advantages of being in a food court is that we don't need to do the same level of marketing."

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