Opportunities lie in shopping centres and online

Nielsen Harrap, associate partner at location planning agency CACI, told conference delegates that there was a growing “polarisation” of opportunities in the retail environment, with massive developments like Westfield Stratford City increasingly dominating the hearts and minds of shoppers.

The number of pub and restaurant businesses moving into shopping centres has risen by 25% since 2000, he pointed out, and the number and diversity of restaurants continued to grow, though wet-led pubs and bars were retrenching. “These trends show the increasing sophistication of consumers [when eating out].”

But retail faced plenty of challenges in the year ahead, Harrap warned, including the economy, competition from supermarkets and web-based retailers and the growth of ‘clone towns’. With online retail spending predicted predicted to reach £78bn by 2015, visits to physical shopping centres might be reduced, while supermarkets are soaking up more and more shopping trips that would previously have been made to the high street.

The good news for pubs and restaurants is that as pressure on shopping parks increases, they will be as important to retail as retail is to them. “Retail centres need to make themselves places that people want to visit rather than clone towns—and that’s where restaurants come in. They’re a very important part of [shopping centres’] offer.”

There are more opportunities for operators to connect with consumers on the internet, added Empathica UK md Gary Topiol at the conference. Consumers are now firmly in the era of what he called “constant connectedness”, in which on and offline worlds have become fused and the use of social media and mobile devices is soaring.

Topiol advised businesses to take particular note of social networking websites, use of which has increased by 240% over the last year; and location-based services like Foursquare, which is growing its user base at a rate of 20,000 a day. These sites can be great marketing tools—but they can just as easily spread criticism of a restaurant like wildfire. Empathica can help operators to create the all-important brand advocates in the new digital world, he said. “You need to get people to talk positively about your business, and to drown out the negative with satisfied customers.”

Topiol warned that because diners are eating out less often than previously, they are getting more demanding when they do visit restaurants. “Customers feel they are entitled to a compelling experience.” The best thing restaurants can give their customers is “the gift of time”—so that they spend less time queuing and waiting and more time taking pleasure in eating and drinking.

Download copies of the two presentations by clicking on the files right, under the Related Media heading