Inside Track by Mark Wingett
Where have our traditional high streets gone? The simple answer is they are now found under one roof either at your local shopping centre, supermarket or Whole Foods Market store.
News this month that Patisserie Valerie, the Risk Capital-backed chain, was to exploring the option of opening concessions under a new partnership with a national retailer, is the latest stage in this development.
It is a theme, as with most things, Tesco is at the forefront of, and this morning the supermarket chain showed its desire to make further moves in the sector by its reported plans to acquire restaurant chain Giraffe for £50m.
The level of foodservice across the retail sector has improved considerable over the last decade. The bid by Waitrose for Eat showed how serious the sector was in developing that side of its business. Asda took this further last year by inviting local restaurant operators to run concessions in some of its Midlands sites.
Tesco has been more inclined to go down the concessions route, signing up Costa and Donino’s to operate in store concessions, both the latter businesses benefitting from brand awareness and the significant footfall the UK’s biggest retailer generates.
The latest additions to its concessions portfolio will be Harris + Hoole, the coffee chain in which it has a highly-emotive stake, and Euphorium Bakery, the café and bakery chain.
Harris + Hoole is to further increase its link with the supermarket chain with the opening of a ‘pod’ site close to its store in Osterley. It is thought that the site will be the first that the fledgling brand has opened under a kiosk format. The chain has also been granted planning permission to open a flagship site above the supermarket’s Tooley Street store in London Bridge. It is also set to open next door to the Tesco Metro in Imperial Wharf.
Euphorium Bakery opened its latest café and in-store bakery in one of Tesco’s supermarkets at the end of last year. The new pilot concession outlet is based in the supermarket business’ Kensington store on West Cromwell Road.
It is made up of a large café operation catering for more than 100 covers, as well as an in-store bakery, which produces a range of artisanal style breads and can be purchased from either Euphorium’s outlet or from Tesco’s checkout tills. A roll-out of this store format would be dependent on the success of the Tesco pilot outlet, which will be trialled over the next few months.
Philip Clarke, chief executive of Tesco, said: “We will back businesses in which we see an opportunity for their brands to grow with ours. Euphorium bakery is another example: an established brand and business, with a compelling offer, it is already in a store in Kensington, offering amazing breads, pastries and sandwiches. It makes what is already a terrific store even better for customers. “
Similarly, according to The Times this morning, Tesco is likely to look at operating Giraffe restaurants within its stores.
Brian Millar, director of strategy at branding agency Sense Worldwide, says: “Multinationals are getting smarter at working with these small brands without ruining their authenticity. The key is often to keep the founder in the business and not have them waltz off to the beach, while the brand they have lavished so much care on becomes just another name in a big house of brands.”
So that is the restaurant, café, coffee shop and bakery side of the operation taken care off, the only thing that is left is a pub, something Whole Foods Market is ahead on
The group’s London flagship, which opened on London's High Street Kensington in a former department store in 2007, has almost an entire floor devoted to foodservice, featuring several restaurants and a pub.
It has since expanded to a further six sites including locations in Cheltenham, in which it launched its first in-store scratch bakery, and Glasgow, with further sites in Richmond and Fulham expected to open this year.
So far the UK has been more of a challenge than the US company anticipated. When it first arrived in the UK, Whole Foods said it would open as many as 40 stores here and expected to be profitable within "a year or two." It is yet to make a profit here, reporting a loss of £4.4m in its most recent accounts, although sales over the same period climbed 9% to £50.6m.
