F&B outlets get bigger bite in shopping malls

PETALING JAYA: Shopping malls are now allocating a higher percentage of their tenant mix (more space) to food & beverage (F&B) retailers, partly because competition from online platforms has impacted other types of retailers such as fashion, according to a market research and consulting firm.

“Traditionally, F&B made up less than 20pc of a mall’s tenant mix, but can go up to 40pc nowadays,” Stratos Consulting Group Sdn Bhd Managing Director Tina Leong told SunBiz.

She said with the tenant mix now consisting of more F&B, this means that malls will need to design or renovate in such a way as to cater to the specific technical requirements that F&B retailers have, for example provisions for water, grease traps, storage, waste disposal and daily delivery.

“F&B as a segment itself has become the anchor for some malls,” said Leong.

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She said malls that have a high F&B tenant mix include the refurbished 3 Damansara (formerly Tropicana City Mall), which now has more F&B compared to before. Similarly, Paradigm Mall in Petaling Jaya has refurbished its lower ground floor, which now consists of more F&B than previously.

Sunway Velocity Mall General Manager Centre Management Danny Lee said F&B makes up 27pc of the mall’s tenant mix currently, and that it is targeting to have F&B reach 30pc.

“Naturally, F&B is doing better compared to others,” Lee said.

Meanwhile, Leong noted that having more or certain types of F&B can also be part of experiential retailing.

“For example, people nowadays, especially millennials, appreciate and are willing to spend on meals or drinks with friends and family, within nicer ambience restaurants or cafes, due to the memorable experiences this create.”

She said to continue to draw shoppers (rather than them shopping online), more shopping malls are looking at creating engaging “experiences” for their customers. Experiential shopping simply means making the physical act of spending money more than simply handing over cash in exchange for goods and services.

“More grocery stores are incorporating food and wine bars where people can enjoy a meal or a drink as well as a social experience before or instead of shopping,” said Leong, adding that some retailers have also integrated augmented reality into their stores, for example Starbucks Reserve Roastery in Shanghai and US-based fashion brand Reformation.

Examples of experiential shopping are malls that have attractively themed or landscaped spots on every floor, where one can stop to take photographs with their friends or family, such as Aeon Mall Kuching. Some community malls in Bangkok, Thailand, have incorporated spaces for pet parks, children’s sand pits and jogging tracks.

“Another recently opened mall, Kiara 163 in Mont Kiara, has incorporated the ‘experiential’ element into their mall design, with a central garden and water features for people to relax. Apart from design features, other ways of creating memorable shopper experiences are through interesting or unique events, activities, decorations, pop-up stores, technological innovations and customer service,” explained Leong.

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She said some of the major major malls have been doing this all along, such as Suria KLCC and Pavilion Kuala Lumpur that usually have attractive and unique festive decorations.

“What is different is that nowadays, the customer experience aspect is becoming a focal point. It has become more important as malls and retailers try to attract and retain shoppers in the midst of competing options such as online shopping,” said Leong.

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