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Restaurants in retail environments on the right track
Train stations and retail are a respected combination but train stations and food have long been regarded as a toxic mix. It was therefore a brave move last year to include a wide variety of food outlets in the St Pancras redevelopment alongside the retail units.
By Glynn Davis
One year on from its grand opening the shopping area of the station now has its piece de resistance trading - the St Pancras Grand restaurant. This adds a bit of fine-dining into the equation and raises the bar for food within a transport/shopping environment.
With its gold leaf ceiling, leather banquettes, menu comprising quality British ingredients, and adjoining Champagne Bar it is world away from the baguettes and burgers that still represent the typical fare of train stations and the majority of shopping developments around the UK.
Even the newly-opened Westfield London does not have the equivalent of a St Pancras Grand operating at the higher end of its broad food spectrum that comprises 50 food outlets. But what both these developments have in common is that they have taken the variety of food available in shopping developments to new levels.
Jonathan Doughty, group managing director of foodservice consultants Coverpoint, is a big fan of St Pancras: “There's some stunning food in there. It has a great range, the best in any transport hub anywhere in terms of price points and products. I'd certainly go there because of the diversity and quality of the food.”
Referring to Duncan Ackery, chief executive of Searcys 1847 that operates the St Pancras Grand restaurant and adjoining Champagne Bar, Doughty says: “He's well tuned-in to the needs of the customers,” but he tempers this with a warning that there will be many challenges now for such higher-end food offerings as consumer spending takes a downward turn.
He points to the Champagne Bar as having quietened down recently following what has undoubtedly been a very successful opening year. Although Doughty believes trade will ultimately pick up he suggests restaurants in retail environments are in for a very tough ride.
But for now he says the food component of most shopping centres is holding up well. Certainly the footfall numbers suggest this is the case. In many developments he says footfall into retail outlets is down by 10 per cent whereas into food units it remains constant.
However, the footfall numbers do not tell the full story. Even when shopper numbers are reported to be higher than last year (Manchester Arndale centre for instance has just disclosed another month-on-month increase) Doughty suggests the problem is the level of spending per head, which is significantly down.
“We are seeing caterers having to work harder for the same cash. They are discounting, although they call it adding value. From 2002/3 we saw conspicuous consumption so it was not about value, it was all about glitz. But now we've stepped back into the discounter world,” he suggests.
This has led to a plethora of promotions from food operators. For example, Café Rouge is running special offers via the website Handbag.com, Starbucks is offering discounts through its loyalty card, and there are numerous two-for-one deals in the marketplace from the likes of Pizza Express.
The problem with such activity is that it is unsustainable over the long term. Brands become damaged, customers become used to the low prices, and margins are badly affected. As a result of this flight-to-value Doughty predicts that post-Christmas there will be a number of closures to follow the shutters going down on units from Pizza Hut and Starbucks.
Although he suggests this will result in some “outrageously good deals” on vacant units, for most operators it will be more a focus on survival than on expansion. Doughty predicts that the hardest hit region will be the South East of England where many shopping centres have targeted their food offers firmly at the middle classes and it is this demographic that is arguably feeling the heat most from the downturn.