F&B is key beneficiary of post-lockdown demand. After a tough two years dealing with the fallout of the pandemic, the great British public is desperate to eat-out, drink and socialise. At the same time, positive changes to the planning use class system are making it far easier for landlords to exploit demand and occupiers to acquire prime premises.
F&B has a key role to play in creating vibrant and sustainable town centres. Pre-pandemic it was key for mixed use destinations as a means of getting people to visit and dwell, to boost footfall and extend operating hours.
Unlike retail sectors like fashion, it also has the advantage of providing something that can’t be bought cheaper online. The property industry was already waking up to the fact that the future of town and city centres lies in experiential offerings rather than purely transactional retail.
When Covid struck, that transformation was put on hold. There were of course casualties, many of which overstretched themselves pre-pandemic and others who simply ran out of cash. It would be difficult for anyone not to have sympathy for these occupiers who are so heavily reliant on customers who were suddenly reduced to a fraction of essential income.
Yet the good news is that people have money to spend and town centres are once again open for business. Consumers are keen to make up for lost time enjoying experiences they can’t get in front of a screen, or by the click of a button.
Insolvencies and empty units have become opportunities; particularly those that are at least partially fitted with extract which are in such high demand. Many F&B occupiers have attracted private equity investment with clear business plans to drive growth by opening significant numbers of new stores.
Market research firm Lumina Intelligence predicts that the value of the UK restaurant market will grow by £6.6 billion in 2022 - 94% of pre-pandemic levels. The market isn’t without its challenges, yet quality operators that connect with consumers will overcome rising costs to exploit demand.
That growth is boosted by the recent introduction by the Government of Class E Planning use which came into effect in September 2020. The new all-encompassing use class meant that F&B operators struggling to gain planning consent could suddenly secure prime high street units.
The demand from retailers is not what it once was, and F&B occupiers are filling that gap. This is good news for landlords, especially where there is competitive tension and rents are driven upwards.
At GCW we are seeing strong appetite from both operators and owners to capitalise on the trend.
The majority of our town centre lettings are F&B-related, be it grab & go, Quick Service Restaurants, or casual dining.
Brands are keen to expand their portfolios, albeit with caution and a focus on prime locations.
We are for instance, helping Japanese sushi and bento restaurant Wasabi expand its portfolio.
In 2021 we helped secure acquisitions in Bishopsgate, Clapham Junction, Putney, and Kingston, with terms agreed on further properties.
The conversion of retail units does come with challenges such as power upgrades, drainage, and gas. However, if property owners are willing to adapt space, prioritise quality and learn how to value popular independents, F&B will continue driving town centre rejuvenation.
It is an exciting time to be involved in the sector and see established and aspiring brands bring our high streets to life.