We’re seeing two interesting patterns. First off, independent operators are being offered real estate leases that they wouldn’t have had access to in pre-Covid times.
Two such operators we’re talking to are negotiating with shopping centres in regional UK cities. These negotiations have arisen as existing tenants are unable to meet their rent commitments or agree a more flexible, mutually acceptable solution with the landlord.
One, a premium drinks brand, is looking to set up a distillery, bar and experiential space in a shopping centre unit, something they claim would be a world first.
The second, an independent events company, is looking to take its coffee and juice business into bricks and mortar. The shopping centre landlord is keen to introduce this young, fun, lifestyle-led brand to attract the right sort of customer to its development.
From a glass-half-full perspective, it looks like green shoots are beginning to poke through and that if you are an operator looking to launch a new concept, deals are there to be had, if you are able to weather the storm.
Adapting what you have
Other operators we’re speaking to are planning ahead to see whether their existing concept is likely to retain traction with customers whose habits and lifestyles have changed since March 2020.
A good example of this is a central-London grab-and-go food retailer who acknowledges that they’re unlikely to enjoy pre-pandemic footfall and is adapting its space accordingly, turning it into something that works on higher margins and larger profit per customer.
Investing in community
We are also starting to see larger retail spaces, such as ex-Debenhams and House of Fraser premises turned into community-oriented, flexible food and retail spaces, such as food halls. This is a phenomenon that retail consultancy P-THREE called F-Hubs in a recent report, where ‘F’ stands for both food and flexible use:
“We calculate potential for around 173 F-hubs across the UK (53 Flagship & 120 Community), totalling approximately 2.9 million sq ft. If you extrapolate this across Europe, the potential is huge.”
We are not seeking to make any bold predictions here but anecdotally, we see some new patterns are emerging that put the customer at the heart of operators’ business planning.
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