Looking ahead to next year we anticipate some of the trends for 2020 in the leisure and hospitality space.
Third space disruption
Third space food markets such as Dinerama, Box Park and Market Halls have exploded in popularity in recent years as consumers increasingly look for new experiences and more variety when eating out. These markets are disrupting the industry and allow new concepts to sell to customers without the risk of entering long term bricks-and-mortar leases. Bigger brands such as MeatLiquor and The Breakfast Club have also been attracted to third space, lured by higher footfall and the safety of an already engaged audience for their offering.
Food markets represent a real opportunity for towns with faltering high streets. The restoration of Altringham Market in 2014 serves as a textbook example with a net increase of 10.7 per cent in the number of licensed premises in the wider area since the market opened. We expect to see further growth in food markets during 2020 as they expand out from metropolitan areas into smaller towns, breathing new life into former department stores and malls.
Delivery kitchens – operators take back control
If the last few years were all about the rise of multi-brand dark kitchens owned by Deliveroo, then 2020 could be the year when restaurants take back control of their remote operations. McDonald’s and Wagamama have recently opened their own dark kitchens to serve local communities and other brands such as Nandos and Tortilla are rumoured to be exploring the concept.
Operators should not underestimate the work required with local communities to make such sites successful. Complaints about loitering delivery drivers and food smells can scupper planning applications and some customers will take issue with food being prepared away from “real” restaurants. With more people wanting a restaurant experience in the comfort of their own home, we expect to see brands extending their reach through self-owned dark kitchens in 2020.
The conscious consumer
Industry and media momentum have seen customer appetites evolving in recent years driven by concerns for the environment, animal welfare and health. This has forced operators to re-evaluate menus and innovate with previously unloved ingredients such as jack fruit and banana blossom, catering to a perceived rise in vegan and flexitarian consumers.
Yet the rise of the conscious consumer is somewhat at odds with the story the market tells. It was recently announced that Shepherd Neame are placing one of UK’s first entirely vegan pubs on the market due to failing to attract local custom, and other high profile “green” brands such as Pod, Abokado and Tossed have all suffered financial restructurings this year.
It’s clear that being healthy and sustainable is not enough on its own to generate a meaningful financial return. Research carried out by Kantar this year suggests that only 3 percent of the UK self-define as ‘vegan’, and 79 per cent still categorise themselves as ‘meat-eaters’.
The shift towards a more conscious consumer will continue to grow and operators will need to evolve their offerings to stay ahead of the competition in 2020 without alienating the quiet majority for whom other factors (cost, familiarity of offering) are just as important. Whilst Greggs developed a customer and media frenzy with their vegan sausage roll earlier this year, they kept their meat options on sale too – innovation is key but not at the expense of your core market.
The hospitality industry relies on the hard work and support of its people to deliver memorable experiences to its customers, with motivated and knowledgeable staff now seen as “table stakes” for successful brands.
Combine the effect of Brexit, which has made the UK less appealing to European workers, with a shift in Millennial and Gen Z workers who crave purpose and community from their jobs and it’s clear that employers need to continually refine the way they motivate and engage with staff. For example, Dishoom’s scheme to donate meals for every order in its restaurant resonates with socially conscious staff. They also take a number of their hospitality team to India to learn more about the culture in which they work. Expect businesses to invest more in their staff in 2020 both to fend off rivals and ensure they are motivated to deliver a memorable experience to their customers.
Casual dining taking over the world
With a saturated UK market and consumer demand weighed down by concerns about Brexit, successful British brands are looking to overseas markets to help grow their top line. Las Iguanas has dipped its toe in the water with an overseas restaurant in Gibraltar. While much was made of the demise of Jamie Oliver’s UK restaurants, his overseas operations continue to grow.
As ever, ambitious operators will need to be weary of the risks of international franchising – limited oversight and control coupled with far reaching social media can lead to brand damage at home. There’s no guarantee that a concept born in the UK will perform well in other cultures and societies. The key is to embrace local markets – McDonald’s sells a McCurry Pan in India and Starbucks offer red bean cream Frappuccino in South Korea. Whilst these mega brands can flex their offering, it’s much harder to adapt when your concept is niche – there’s only so many ways you can present sushi or burritos. Ensuring a good cultural fit will be key to the success of brands operating overseas in 2020.