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News release

CHICAGO

Global Food and Beverage Industry Takes a Cue from Fashion Retailers    

Restaurants cross international borders, with dedicated space up five percent in the last decade


CHICAGO, Dec. 20, 2016 – In the quest for growth, food retailers are on the heels of the fashion industry expanding globally and combining technology, gastronomy and a bit of psychology to entice, entertain and satisfy, according to a new report by JLL released today. Like its fashion counterpart, international food and beverage expansion is being fueled by low growth in US and Western European markets, an increase in globalization and tourism, and the rapid rise of the middle class, especially in Asia and the Middle East.   

"We are seeing new chains such as U.S.-based Eataly and Chipotle, U.K.-based PizzaExpress and Germany's Vapiano, as well as upscale restaurants from celebrity chefs, including American Gordon Ramsay and British Jamie Oliver are among the latest to arrive where mainstays like McDonald's, Subway and KFC landed years ago," said Jonathan Doughty, Head of EMEA Foodservice Consulting for JLL.

The amount of global retail space dedicated to food and beverage service has increased five percent over the past 10 years and by far more in some regions. The addition of dining and drinking destinations can provide consumers a reason to travel to a city retail area and increase their time spent there. Such establishments, if well configured, can boost consumers' shopping experience and give them a reason to return.

"New concepts often provide diners with internet access, where they can post reviews and pictures," added Naveen Jaggi, President of Retail Brokerage and Capital Markets for JLL. He notes that pop-up concepts can create a go-before-it's-gone immediacy, which we saw recently with the Saved by the Bell Chicago pop-up The Max, which entertained and drew pop-culture fanatics from all over the United States. Pop-ups also can provide a level of exclusivity, like the tony "Cube" that travelled around Europe showcased a different Michelin Star chef for a week or a month at a time and served only about a dozen guests each evening.

Regional food and beverage trends:

In the United States, yesteryear's food court -- dominated by neon fast-food chains -- have morphed into food halls and indoor markets dedicated to local food sellers and artisans. Such areas can act as anchors for a shopping center or breathe new life into an abandoned warehouse, office building or factory. To succeed, these retail spaces need to cater to a diverse group of consumers – be it student or business traveler -- with the expectation of eating what they want, when they want it no matter the hour of the day, be it breakfast in the evening or dinner at noon.

In Asia, the amount of space dedicated to gastronomy over the past 10 years has jumped as high as 30 percent in some parts of Asia and the Middle East, luring US and European food and beverage providers itching to expand. Many of these providers are franchising their concepts abroad as a way to capture local market expertise. Franchising also provides the necessary capital to tackle these geographically disparate markets. PizzaExpress is targeting the Asian market, as are US retailers The Coffee Bean & Tea Leaf and Pacific Coffee Co and British Caffe Nero.

In Europe, London-based Time Out magazine, which owns and operates food hall Mercado da Ribeira in Lisbon is seeking to expand its concept across Europe. Meanwhile, the UK is the site of Burger Wars, where local plays such as Gourmet Burger Kitchen, Byron and Meat Liquor are going head-to-head with US-based gourmet burger players, such as Smashburger and Five Guys. The same conflict is expected to spread to crepes, burritos and juices, while the playing field is expected to spill over to the Middle East and Asia.

JLL's retail experts partner with retailers, investors and owner/operators with an extensive team of dedicated experts around the world. They understand the inherent complexities and variability associated with both the retail industry and increasingly complex capital markets. JLL's specialists are recognized for their independent and expert advice to clients, backed by industry-leading research that delivers maximum value. With leading in-depth knowledge of the local, regional and global market dynamics, JLL aims to truly partner with its clients for the entire lifecycle of an asset or lease. Its experts deliver clients maximum value to support and shape their investment, site selection and brand strategies.   

JLL is the largest third-party retail property manager in the United States with more than 1,000 centers, totalling 125 million square feet under management. The firm has more than 140 retail brokerage experts spanning more than 30 major markets, representing more than 900 retail clients. In 2015, JLL's retail experts completed transaction management and portfolio optimization on 1,500+ leases, negotiated 500+ leases for retailers and 1,000+ leases for landlords and completed more than $2.7 billion of investment sales, dispositions and financing for investors. For more news, videos and research from JLL's Retail Group please visit: www.jllretail.com.

About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate.  JLL is a Fortune 500 company with, as of December 31, 2015, revenue of $6.0 billion and fee revenue of $5.2 billion, more than 280 corporate offices, operations in over 80 countries and a global workforce of more than 70,000.  On behalf of its clients, the company provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. As of September 30, 2016, its investment management business, LaSalle Investment Management, has $59.7 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.