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New hotspots arise, as F&B seeks affordable rents

F&B has proven to be very innovative in meeting the needs of the changing consumer market. That is why, in recent years, this sector took a lead role in retail transformation. Due to its steady growth, F&B is able to create hotspots in unexpected locations.

The consumer market has changed considerably due to millennials, currently being followed by Gen Z reaching adulthood. These young customers are much more aware of the earth we live on, and, how we live with each other. They want to know the story behind the location and the food, as well as having it look great so that they can bond with people over the experience.


The changing nature of the consumer market has led to many new concepts that have ‘a story’ and a sense of community to it. Enterprises that include sustainable, philanthropic and socially responsible aspects in their business operations are popular. Examples are The Green House in Utrecht, Frea in Berlin and The Green Vic in London. Another trend is personalization, in which you fully compose your own meal, such as poke bowls, ramen noodles and burritos. This is also reflected in the popularity of food courts, where everyone can choose their own kitchen of preference.


‘High-end’ delivery
Besides a great food experience there is a increasing demand for convenience, noticeable in delivery growth. A new trend is ‘high-end’ delivery, following a growing demand for more exclusive meals to consume at home. It gives you the experience of eating in a restaurant without physically being there: quality food at your doorstep. This has led to a new phenomenon: dark kitchens. They can be situated basically anywhere, as this kitchen focuses solely on delivery. There is no need to choose for prime locations as long as it is close enough to a large consumer base, for instance in industrial locations. This means lower rents and larger spaces.


New hotspots
It is a fact that consumers eat and drink more regularly outside their house or, on the other hand, use takeaway and delivery services to eat at home. Cities can profit largely from this, as F&B takes up vacant retail spaces and often opts for unexpected locations in the search for affordable rents. This creates new hotspots, for instance in neighborhoods that are nowhere near the city centre, as traditional retail follows suit. The same counts for dark kitchens, which take up affordable spaces outside the urban hustle and bustle.


Game changer
It is beneficial for urban development to let F&B grow, however, this requires the willingness to adapt for policy makers and real estate investors. First of all, local governments should change regulations and legislation to the needs of F&B and speed up permit procedures. Another game changer lies in real estate, for retail rents are often too high. F&B comes with major expenses due to necessary renovations and needs more personnel than traditional retailers. Property owners should be aware of this when they negotiate with F&B tenants, especially bearing in mind that they can create new hotspots. This will be beneficial for them in the long-term as property values in the area will increase. When rents eventually get too high here too, the biggest will stay and other pioneers will lift another unexpected location.