The eating and drinking out market is geographically polarized, with some markets over-supplied, rents unsustainable – and fall-out inevitable, Knight Frank has warned.
The commercial property agent predicts in the face of a potentially over-heating market, rents will plateau and operators will take a more considered approach in assessing options.
Towns, cities and shopping centres which are undersupplied with casual dining are likely to see the largest levels of growth as restaurateurs try to exploit this undersupply and escape the highly competitive London market.
Most major regional cities, such as Leeds, Glasgow, Manchester, Birmingham, have an appropriate F&B offer relative to their standing as an overall retail destination.
But areas of London, such as Ealing, Wimbledon, Hammersmith, Chiswick, Clapham Junction and Wandsworth, are oversupplied, according to Knight Frank’s analysis.
Less obvious towns with a strong supply of F&B include Chelmsford, Woking, Camberley, Wokingham, Staines and Bishops Stortford, towns with affluent, commuter belt catchments.
Knight Frank also identifies a number of leisure-light towns as offering potential opportunities for operators, including Kingston-upon-Thames, with schemes such as The Rotunda and Kingston Riverside not fully redressing historic under-supply.
Retail centres that fall into the same bracket include Chester, Hull and Plymouth, as well as second tier Portsmouth, Doncaster, Ipswich, Middlesborough, Ayr, Stockport, Truro, Oldham and Stevenage.
The herding around areas Outer London Centres such as Richmond, Wimbledon, Chiswick, Hammersmith, Clapham Junction, tourist destinations such as Windsor, Oxford, Cambridge, Bath, York, Durham, Stratford-upon-Avon, and affluent market towns in the South East such as St Albans, Winchester, Salisbury, Canterbury, Guildford, Henley-on-Thames, raise question marks as to whether some of these are now over-supplied and facing a degree of fall-out, Knight Frank warns.
Summarising the findings, partner Stephen Springham cautioned against assuming “demographically challenged” – or less affluent towns – did not have the disposable income to eat and drink out.
He said: “One of the biggest misconceptions in retail is that the most affluent people spend the most money. This notion is increasingly being challenged. Affluent consumers often have huge conflicts within their wallet, with shop-based spend often subordinate to housing, school fees, healthcare, holidays, cars and transport. In contrast, less affluent consumers may have less cash, but what they do have they are for more predisposed to spend in traditional retail and leisure channels.
“Family-based dining out is not the preserve of the middle classes. When the initial F&B Gold Rush is over, there may well be a few nuggets left in some of the less celebrated locations (yes gold, not chicken).”