5 MEGA TRENDS RE-SHAPING F&B SPACES POST COVID-19

CoVID-19 is bringing permanent change to the Hospitality sector. Find out 5 ways Landlords & Developers must change F&B Planning to survive and thrive.

Albert Einstein said, “The definition of insanity is doing the same thing over and over again and expecting a different result.” For F&B planning, this quotation is so applicable when we consider the future of F&B precincts across Australia in a post CoVID world – hopefully around 2022.

To continue to plan, design, and lease F&B stores, the same way as how it was done pre-CoVID, will undoubtedly be a sign of INSANITY. If you don’t want to see your development end up in the looney bin, here’s 5 Mega Trends from Australia’s leading F&B consultancy firm, Brain&Poulter as to how to think differently and come out a winner.

MEGA TREND #1 – QUANTUM

Overall, peak industry bodies predict a contraction in the quantum of F&B outlets in Australia,  some saying as much as 25% of all restaurants will close. Brain&Poulter predicts a ‘re-balancing” of numbers, with contraction in the CBD, replaced by growth in the suburbs due to “Working From Home” changes. If the majority of office workers were to spend just one day a week working from home in the “new normal,” that would result in a 20% contraction in demand for coffees and lunches in the CBD. Yet the need for coffee and a poke bowl lunch doesn’t go away – it’s just shifted location –closer to the worker’s home.

Doing it the same: Pre CoVID, many F&B lease plans were carved up either by the architect in terms of how many boxes they could create in a space or by leasing based on how many hot prospects they had on their books. This approach going forward could quickly end up over or under-fooding a location.

Doing it Differently: post-CoVID, developers investing in sound market research by F&B experts to identify F&B demand and customer profiles.  Creating a customer-centric F&B lease plan, developers will find their development leases faster and retains tenants for the term of their lease.

MEGA TREND #2 – CAPACITY

Before CoVID, seating ratios for F&B outlets were based on somewhere between allowing 1.1m²-1.4m² of space per customer. As the pandemic came under control, the majority of States have limited capacity to 1 customer per 4m² of space. This radically decreased seating capacities and therefore earning potential (productivity – measured in sales per m²). As a nation, our “personal space” has expanded in the last six months.  That is long enough now for it to have formed a habit. In the post CoVID world, crammed internal spaces will strike fear in customers and limit engagement.

Doing it the same: Forecasting sales and rent productivity on pre-CoVID benchmarks will create unrealistic feasibilities and lower ROI.

Doing it Differently: Increasing external seating areas, adding mezzanine seating, controlling the length of booking times to increase table turnover are some of the ideas smart developers and operators will implement so they can drive up sales productivity.

MEGA TREND #3 – REVENUE STREAMS

With internal dining capacity curtailed and significant growth in the “dining at home” sector, landlords need to find tenants who can prove their business model does not rely solely on dining-in. Brain&Poulter encourages landlords to check operators have at least seven different income streams modelled in their business plan before executing a lease.

Doing it the same: Doing deals with tenants that had a successful track record pre-CoVID. Doing deals with “favourite” tenants. Doing portfolio-wide deals. All these could result in poorer rents as operators fail to maintain or grow sales.

Doing it Differently: Amending the lease application forms to deeply investigate how the prospective tenants plan to drive alternative sales such as drive-through, delivery, in-home events, live streaming, merchandise, collaborations, social media. Landlords that use an F&B expert skilled in reviewing the application to ensure the concept and plan match the capacity and the design will be more likely to execute leases that meet the financial expectations of both landlord and tenant.

MEGA TREND #4 – DESIGN

Many landlords believe in “Build It and They Will Come.” This belief is an INSANE mantra in the new normal. Common area (landlord) design needs to change to incorporate contactless ordering and collection, more external and alfresco space, touchless entry/exit and selection of more hygienic materials and finishes. F&B tenant design needs to change to allow for contactless collection, direct takeaway access, customer safety and one-way customer flows.

Doing it the same: Letting your design be dominated by customer experience. This will leave you with a gaping hole in the strategy and design to capture customers who don’t want to dine-in but want convenience.

Doing it Differently: Thinking about how to design a precinct to facilitate as many customers for takeaway as for dine-in to ensure maximum engagement and frequency of use of the precinct by differing customer segments.

MEGA TREND #5 – TECHNOLOGY

During the lockdown, the fastest-growing activity undertaken by Australians was using food delivery services. For many landlords hooked on “bricks and mortar retail,” encouraging delivery seems the antithesis of building F&B precincts. B&P concedes that this is precisely who Albert Einstein was talking about when he coined the definition of insanity. To thrive after CoVID, an F&B precinct needs to be omnichannel.  The landlord must control the umbrella technology to facilitate a fully digital order,payment and collection system,  otherwise F&B tenants will move off-site into dark kitchens where they can generate the same sales using a hybrid of dine-in and delivery and not have to pay as much rent. B&P has white-lable app solutions designed explicitly for F&B precincts (but applicable to the entire retail offering) to tackle this necessary change.

Doing it the same: Spending marketing dollars to get people to come “into the Centre” while denying the move to on-line shopping and home food delivery

Doing it Differently: Investing in precinct-level ordering, payment, collection and delivery technology. Designing specifically to provide space for contactless ordering and collection. Utilising the technology to collect valuable customer insights and data.

B&P’S EXCLUSIVE F&B PRECINCT BAROMETER

Find out if the pressure on your F&B development is rising or falling. B&P has developed an F&B barometer to measure the winds of change and how they apply to your asset. Contact us here for a FREE 30 minute review of your development to see what reading our Barometer reveals about your project and whether you’re going mad or not!

Use B&P’s Resources To Boost Your Portfolio Performance

Retaining your F&B portfolio will take more than rent abatement. Throughout the pandemic B&P has provided thought leadership and real time tools to manage F&B operations and preserve rent and customer amenity. We now have a whole suite of 8 CoVID-19 resources available to tenants and retailers to get through this pandemic and thriving on the other side. Check out our website for all the latest resources available.

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