'Local' Food and Hospitality influences in the Business of Food

By Allan Forsdick

Successful dining clusters across Australia have adopted a place-first ‘local’ strategy that creates a destination in the heart of the community. This local strategy requires a shift to prioritise a hospitality experience over just a generic paint by numbers F&B amenity. Contemporary centres have expanded their success metrics from the size of the retail spend to now include the overall experience metrics. Food and hospitality continue to be the big driver of the experience economy across all sizes of centres, especially when delivered in company with entertainment and social experiences.

Ed Square, Sydney

To create a unique destination and increase frequency of visitation, food and hospitality must be given a foundation for success. A key factor of locally-focused precincts, such as Ed Square by Frasers Property, in south-west Sydney, is its external ground level dining precinct. This presents not as a shopping centre experience, but a laneway and town square experience. It provides a streetscape, personality and al fresco dining opportunities. Notably, it has the ability to trade completely independently of the retail trading hours and forms part of the Entertainment & Leisure Precinct (ELP).

Around Australia & New Zealand, regional and local centres are strengthening their revenue opportunities with a strategic evening economy component. In areas of new or fast population growth this is especially relevant – here the population will support growth into destination centres, no longer just for retail purchases or a cinema visit. Restaurants, casual dining; and even bars play a pivotal role in this expansion.

Brickworks, Auckland

Whilst most centres over 100,000m2 are likely to have an ELP and/or independent dining destination as a key part of their overall mix strategy, it is now essential for any centre with the aspiration of moving beyond the standard retail trading hours that F&B becomes a significant segment of the overall mix.

Mind Your Demographics

For Millennials (1981-1996) and older Gen Z (1997-2012) cohorts, spending preferences have been notably chronicled by the rise of experience spending. Its less about what they have, than what they do. Food and hospitality frequently form the canvas on which these socially-fascinated cohorts engage with their peers and friends.

This appetite for social experiences and immersive environments has; and is, leading the rise of F&B spending. There is a clear trend of increasing F&B spending as a percentage of discretionary income. Mini Gun centres, with their smaller size and typically more convenient access, can capitalise on this trend with a generation that values convenience.

Providing the same cookie-cutter F&B mix in every centre, however, will not deliver long-term sustainable growth or differentiate the centre to maximise the opportunity provided by a remix or redevelopment. The modern consumer is hungry for new experiences in new environments; shopping centres must utilise food and hospitality to shape their appeal and create a strong point of difference.

This must be done by adopting a ‘local’ mindset that embraces a hospitality-forward approach rather than just a collection of national food brands in a shopping centre. Modern food and hospitality precincts should have a strong narrative: to excite, inspire and engage.

Activated edges around shopping centres and retail precincts (Geelong, Victoria)

Food as an Experience, Not Just a Service

The growth of entertainment, leisure and dining precincts has redefined the way we think about planning food in our developments, with lessons learned filtering into Mini Gun centres. If customers are willing to pay for an experience, what exactly does that experience involve; and how can mini gun centres differentiate themselves from their competition? How can developers create a sense of community through their F&B offers?

F&B environments need to be given an appropriate physical and experiential platform that will allow them to be successful, these factors are different from the retail environment.

Ed Square, Sydney

Activated edges present a message of – "we are open for business!"

Ensuring our customers inherently understand that we have a hospitality precinct distinct from a retail precinct provides both appeal and activation of the centre regardless of the operating hours of the retail. This will be especially important during the evening, when the surrounding retail may be closed.

Access to our hospitality precincts must be obvious, clear and intuitive. High connectivity with key access points such as car parking, street entries and retail precincts, supported by clear and obvious wayfinding are imperative.

A food & beverage mix strategy biased towards new precinct ideation, expanding concept ideas, original cuisine choices and diversity of service options that are not saturated in the local market. Your customers do not need more of the same.

Experience is the overarching concept. Diverse, vibrant, exciting, connected destinations require consistent planning and experience management. An ongoing calendar of events that drives engagement cannot be underestimated in developing resilient social destinations.

Moonee Ponds Central, Melbourne

Moonee Ponds Central in Victoria (Mirvac) demonstrates these principles, split over Hall street in Moonee Ponds and blending in with other food outlets along the street, but activating their main pedestrian artery through their own precinct. The focus on local concepts, diverse mix of cuisine, differentiated service options and convenient access is appealing and repeatable.

The Differentiating Factor: Future-Proofing Retail Centres

The answer lies in differentiation. Retail centres need a unique selling point to compete with non-retail destinations. By applying the 'Divide and Differentiate' principle to their F&B master plans, retail centres can future-proof themselves against an increasingly fragmented and competitive market. A well-curated F&B offering can extend the customer visit across multiple day parts, contributing to the evening economy and enhancing customer engagement, which in turn maximises turnover and asset value.

Timeout Mall, Dubai

To succeed, the customer must be placed at the centre of every decision. This means anticipating the desires of future shoppers and diners, who are increasingly knowledgeable and discerning about their food choices.

Bringing 'Local' to the Mini Gun F&B Master Planning

F&B strategies dictated solely by leasing tactics often result in lower average spending, which negatively impact a Mini Gun centre's turnover per square metre. By introducing local concepts that already have a strong following, centres can create a community-focused F&B offering that enhances customer engagement and increases spending.

It’s important to note that 'local' doesn't imply low quality or a rough-around-the-edges aesthetic. Customers still expect high standards in design, ambience, menu depth, and service. Local concepts are those that are homegrown, accessible, yet refined—non-national brands that still meet consumer expectations.

For mini gun centres concerned about competition from the high street, bringing successful local concepts into their spaces is no longer aspirational—it’s essential. By aligning local F&B offerings with the centre’s overall positioning, retail developers can create a vibrant dining scene that attracts both regular shoppers and new visitors.

The Future of F&B: Catering to Customer 'Need States'

As with fashion, food is now a key part of personal expression. Today’s diners are looking for an authentic experience that reflects their individual style. Whether it’s street food, a local grocer, or casual dining restaurant, customers are seeking out food that resonates with their personal values.

To meet this demand, centres must engage in thoughtful planning that blends various disciplines, from understanding consumer preferences to curating an experience that satisfies emotional and social needs.

If 'local' is the future of food, how will your retail centre respond to this growing demand for authenticity and connection?

Understanding the role of local communities in shaping F&B offerings is essential to the future of Mini Gun centres. By embracing homegrown talent and aligning with the values of the educated diner, retail developers can ensure their centres remain vibrant, relevant and successful for years to come.

Article first published in Shopping Centre News, 2024