The food and drink sector has taken a bigger slice of UK shopping space over the past three years, with one in five retail and leisure units now occupied by restaurants or cafes.
Appetite for foodie outlets shows no signs of stopping, with 3,000 new food and beverage units planned in the next two years according to a new report by Cushman and Wakefield.
Consumer taste for eating out is powering most of the sector's growth, with this sub-sector predicted to expand by 17 per cent over the next four years to be worth £103bn. Growth in 2017 alone is expected to hit 3.8 per cent, ahead of the total consumer spending average.
Cafés and takeaways have seen the strongest growth, with units up 1,527 and 1,035 respectively in the last three years. Within those categories the most popular new openings were coffee shops and pizza take-out joints. At the other end of the scale, the well-documented decline of pubs saw the total number fall by 319 in the same period.
Specific trends highlighted in the report included growing popularity of American food operators, which increased by 395 units since 2014 thanks to the success of restaurants like Five Guys and Red’s True Barbeque. Japanese cuisine also gained traction, with growth of 192 units. But these came at the expense of Indian and Chinese restaurants, with the removal of 205 and 192 sites respectively in the same period.
The increased presence of food and drink units in the last three years coincided with the decline in traditional retail. Clothing, footwear and white goods shops decreased by 2,185, while restaurants and cafes increased by 2,998.
Thomas Rose, Head of Cushman & Wakefield’s Leisure & Restaurants team, said: “Online retailing has grown rapidly and, as a result, consumers are changing their habits. Food and beverage outlets, which offer an experience that cannot be replaced wholly online, present an opportunity for landlords to increase dwell time and expenditure within their centres."
But there is some evidence of an approaching slowdown. Spending growth in the eating out sector, having jumped to a peak of £3.6bn in 2016, will this year slow to an expected £3.3bn, then 2.5bn in 2018.
Demand for food and drink spaces in London also appears to be slowing. In 2016, the food and beverages sector accounted for 36.9 per cent of all site requirements in Greater London. In the 2017 survey, this figure fell to 33.7 per cent. High levels of competition, rising rents, business rates changes and increases in the national living wage were cited as the principal reasons for the drop in demand.
Darren Yates, Cushman & Wakefield’s Head of Retail Insight, said: “The total growth in the eating out market can sustain the projected growth in outlet numbers but several downside risks remain, such as higher inflation, potential business rate increases, a rise in the living wage and, potentially, tighter labour laws due to Brexit.”