As published in Shopping Center Business, December 2019
Food is one of the all-important Fs that reign supreme in today’s shopping centers, along with fun, fitness and, depending on who you ask, fashion and maybe furniture. Some may even say it’s the top “F” of the bunch. This category can be a no-brainer to landlords who have space to backfill. That space can be plentiful when you consider the amount of bankruptcies, closures, downsizes and consolidations occurring in today’s retail environment.
Food halls, alleys, clusters, rows, courts and collectives have become so popular they can now anchor a shopping center.
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THE PARTNERSHIP APPROACH
…Matt Hammond, senior vice president at Coreland Companies, notes there is another pitfall landlords must avoid, even when it comes to concepts with nationwide success.
“When evaluating a prospective franchise tenant, do your due diligence on the operator as well as the company and/or franchisor,” he advises. “Often, franchises receive very little support from the brand. A franchise restaurant will never run itself simply because of the name. Look for savvy operators that want to be involved day to day. Operators that have the vision, work ethic and passion to be successful.”
There is also a strategy, he notes, to creating a teamwork approach inside collectives – at least when it comes to motivating the individual operators.
“If you have seven food and beverage operators, five of which have growing sales, one is maintaining and one is declining, chances are that the one in decline is a stagnant concept or not being run well,” he says. “Make the collection of gross sales a priority in lease negotiations. Sales of any of your tenants, especially restaurants, is critically important to understanding the health of the shopping center.”
… Hammond adds that while shopping center operators tend to be mindful that their concepts aren’t in direct competition with one another, they aren’t always as good as remembering that restaurants are also competing for parking spots.
“Accessibility is also a top priority,” he says. “Second to quality, parking convenience and walking accessibility are key factors in restaurant success. You will cannibalize your restaurant lineup by alienating customers who simply can’t get in and out. In many situations, parking restrictions by default acta a ‘governor’ to limit landlords from going too crazy with their food and beverage options.”
For the compete article, go to Shopping Center Business-December.