Comment: Retail feasting on food and drink propositions
Food and drink has become an increasingly important part of the retail landscape with customers demanding a richer experience in-store and an obvious solution is to introduce a café, restaurant or bar to boost dwell time and drive engagement.
There has certainly been a cranking up of activity post-pandemic as the physical space has enjoyed something of a renaissance and food and drink is proving a sweet spot for many retailers.
Cafés play critical role
For Hamish Mansbridge, CEO of Heal’s, the store’s new café is “critical, not just a nice to have”. It replaces a more full-service restaurant that was removed during the major remodelling of the store as it did not fit within the new layout. However, Mansbridge ensured the store’s lease included a clause that states the landlord has to provide a café. It now sits on the side of the shop technically outside the Heal’s footprint.
Never Miss a Retail Update!“I want my customers to enjoy the offer and we can give them a card for a free coffee in the café where they can go to consider a purchase. I want them to see it as a component of the store, that it’s part of the experience. It’s the most visited part of the store. The most frequently asked questions by customers are – where’s the loo and where’s the café?” explains Mansbridge, who adds that it is also frequently used by Heal’s employees.
Larger stores, particularly department stores, have a long heritage of including food and drink offerings and in recent weeks there has been a notable increase in focus on this element of the mix. John Lewis has recently stated that restaurants and cafes are a key part of its strategy. At present 20% of transactions go through its cafes and it has plans to add five more eateries in 2025, which will follow the new Jamie Oliver Cookery School and 50-seat café at its Oxford Street store.
Escaping shopfloor bustle
Katie Papakonstantinou, director of services and hospitality at John Lewis, says: “Whether it’s a chance to ponder a purchase, or an escape from the bustle of the shop floor, having a varied and exciting assortment of hospitality offerings within our stores is vital for our customer experience. It’s why we are continuing to invest in new offerings, and why by the end of the year we plan to have over 60 dedicated hospitality spaces across our 36 stores.”
Just down the road department store Liberty has celebrated its 150th Anniversary with the opening of a new restaurant, Seventy Five at Liberty, having partnered with catering firm Goose + Berry that had run a pop-up in the same space in the store last summer.
Hannah Martin, founder of Goose + Berry, says the 84-cover restaurant is very much a collaboration with the Liberty store itself: “It creates exciting opportunities for cross-promotion and shared storytelling. A good example is our LBTY- inspired cocktail menu, which bridges the worlds of fragrance and flavour to offer guests a truly immersive experience.”
Martin says the restaurant brings a multitude of upsides to Liberty. “First and foremost, it provides the store with the dining experience it truly deserves. Seventy Five enhances the customer journey within Liberty, acting as a destination in its own right. It encourages guests to linger longer, increasing dwell time, and giving them another reason to stay, savour, and explore more of what makes Liberty so special,” she explains.
So far it has been well received by customers, according to Martin, who says: “It’s been fantastic to see the demand grow, and with that, it’s been essential for us to use those moments as an opportunity to review what we offer and introduce new dishes that keep both the food and service at the level our guests expect. We’re fortunate to have an exceptional team in the restaurant, and their passion, skill and commitment have been at the heart of everything we’ve achieved so far.”
Destination dining
The hope is that Seventy Five becomes a destination that people seek out specifically to dine in the store and then, in turn, they step onto the shop floor and continue to discover more about the unique Liberty outlet.
This is certainly the case at Fortnum & Mason that serves a very popular afternoon tea on the fourth floor in the Diamond Jubilee Tea Salon. Many people seek out food items on the lower floors after their dining experience.
A grocery sales associate at F&M says: “There is a constant stream of customers who come downstairs clutching their afternoon tea doggy bags asking where they can find the jam, the curd, the scones or the tea that they have just enjoyed upstairs. They want to replicate the experience at home.”
Harrods has long been a destination for diners with many restaurants in the store. In recent years it has gone all-in on developing its hospitality offering involving changing 21 of its restaurants to make it the home of celebrity chefs, exclusive first-to-market concepts, and world renowned bars. Some of them have been short-lived partnerships while others have become established but what has not been in doubt is the famous store’s commitment to food and drink.
Overseeing this major revamp had been Ashley Saxton who recently left his role as director of restaurants and kitchens at Harrods where he had responsibility for 45 restaurants across six countries including the 26 restaurants in the flagship Knightsbridge store. It remains to be seen what impact his departure will have on the ongoing development of food and drink at Harrods.
There has also been change at Selfridges where Lucy Menendez has re-joined the retailer as director of restaurants and food having previously done a two year spell as executive food & hospitality director at rival retailer Harvey Nichols. There is no doubt that it has had a tough spell in recent years with its Fifth Floor destination dining room and grocery section losing its appeal.
It was a formidable player in the London dining scene in its heyday and undoubtedly set the benchmark for food and drink in department stores. The company recently stated: “Harvey Nichols is undergoing a significant transformation to re-establish the brand as a British icon and flagship destination.” In the meantime it has closed its grocery section on the fifth floor and hosted a pop-up restaurant with renowned Italian restaurant Trullo.
Investing in foodservice
It is not all at the smarter end of the retail world where food and drink is playing a major role because Asda has just announced a £10 million revamp of its cafés in partnership with foodservice specialist Compass. Over 180 dining spaces will be renovated between now and October that involves diversifying its menu, introducing kiosks for ordering, and offering table service.
It is a move that goes against the trend seen recently among the major grocers who have had a downer on their in-store dining spaces for many years. Both Morrisons and Sainsbury’s have recently announced major closure programmes for their restaurants, which have undoubtedly been partly down to managing their cost bases that involves reducing labour costs.
This pull back from catering is very unlikely to be on the agenda of the garden centre category that has over the years been gung-ho for introducing ever more comprehensive food and drink offers. The proportion of income derived from cafés/restaurant offerings within UK garden centres hit 14.9% in 2023 compared with a mere 7% in 2021, according to research from Savills.
This figure is unlikely to have fallen within the last couple of years judging by the level of customer activity seen around the dining rooms in most garden centres where the square footage assigned to food and drink continues to grow and the new models of the upmarket farm shops are very much focused on the hybrid garden centre/restaurant model.
As customers seek out greater experiences it is likely that food and drink will continue to play an increasingly important role within the retail sector as physical space moves beyond its original function of simply being a platform for selling goods.
