Food for Thought

Wednesday 25 November 2020 @ 10:00am – 11:00am GMT



As one of the 3 key elements to survival, food plays a vital role in our lives and has proven to be a safe investment even during a global pandemic, but how will this success translate to the buildings from which it’s sold? The latest re:think debate will explore the future of food real estate and the potential for even greater success.

As with all re:think topics, we first discuss as a team before opening up for commentary from a wider audience. During our internal team debate, these were the main points raised:

  • Supermarket COVID19 Immunity

With some supermarket chains reporting like-for-like sales up by almost 3% in the three months leading to the start of October, it would be fair to say that supermarkets have benefitted where Food & Beverage retailers have not during the pandemic. With most people being forced to consider new ways of eating at home and many now preparing an extra meal at lunch, twin this with no real end in sight for working from home the rise is sales seen will more than likely continue. But how will this affect the real estate many supermarkets currently operate from. During the previous 5-10 years, we have seen a shrinking in portfolios from many of the large supermarket chains, often to the detriment of their localities. Will we now see these re-opening? In what guise? Names such as Tesco have been redeveloping parts of their assets and realising greater value from their sites by shifting to alternative uses such as residential or in some cases wholesale redevelopment of their sites. Will we see this trend continue with the rise in popularity of online sales? 2020 saw and online sales leap 72% year on year. Will we see supermarkets becoming dark stores or distribution centres?  With existing servicing and additional land from carparks, there is a myriad of options these retailers can consider when looking to the future.

  • The Rise and Rise of Food Halls

Pandemic aside, food halls, when executed correctly, are fantastically successful leisure destinations and provide a democratic environment accessible to many due to their ever-changing and vast offer. Successful brands, such as Timeout markets, are still expanding into new territories (Dubai 2021) and increasing the offerings in existing locations, such as London with two new halls in the pipeline. Will these continue to be in vogue in 5 years? We think they will be, but they’re not the silver bullet for a failing destination and must be managed in the right way to continue to entice customers.

  • Online Food Sales are the ‘New Normal’

This year has seen us all locked-up in our homes, therefore, delivery is currently the safest and most efficient way of shopping for many. The ease of which most products can now be delivered to us with little cost is only going to make online shopping more popular, concurrently, people are going to become accustomed this form of consumption creating a ‘new normal.’ This will lead to an increase in requirement for distribution centres; local regional and national. This will level the playing field for smaller retailers to compete and utilise similar distribution networks at a smaller scale, further increasing the competitiveness of the market.

As well as cooking at home, more and more people are ordering food to be delivered as a treat, increasing the attractiveness of existing, well-known or exclusive F&B retailers to move to dark kitchens to increase their franchise catchments without incurring expensive highs street rents. There are currently few examples of these ‘dark kitchens’ but, it is an ever-expanding sector and one in which we see great expansion opportunities.

  • Food Department Stores – The Future of Retailing?

Whereas a classical department store was used as an anchor for a retail destination, we are now seeing that these assets needing to become a destination within themselves; providing a more curated and specific offer to retain customer numbers. As such, some retail asset managers are looking to food as that theme to create a destination with multiple vendors and experiences based around the same offer. This is something that is becoming increasingly more popular in continental Europe and particularly with destinations with a large suburban catchment area, further compounding the attraction for all generations, families, couples or individuals to spend elongated durations in one place.

  • Alternative Production Methods

The way we source our food is and will become even more of an important factor to consumers in a bid to combat the impact we have on the planet. For those Towns, cities or countries where space is at a premium, looking to more innovative ways of producing food is now becoming more of a viable option. This is even truer now that the current tenants of large footprint ‘big-box’ units are becoming fewer and therefore rental values are dropping to a more acceptable level. Could we now see urban ‘farms’ becoming the tenant of the future? Leonard Design Architects are currently working with an incredibly exciting start-up to make this a reality and reduce the embodied energy in some of our most popular foods that are currently imported by airfreight.

  • Local Shops for Local People

This year’s move to working from home has had a positive effect on the local high street. With more of us spending increased amounts of time in our local boroughs we have been forced to find local vendors to provide the retail and sometimes social outlet we all crave. The local high street as we knew it pre 2020 is now seeing a resurgence which will lead to an increase in demand for space and therefore interest from investors and developers. This will be further exacerbated as we move closer to densification once again of smaller town centres with good transport connections to larger cities.

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