UAE residents third biggest F&B spenders globally in shopping malls

April 17, 2016 | By RetailME Bureau

UAE residents are the third biggest F&B spenders globally in shopping malls, followed by counterparts in Norway and Switzerland, reveals an F&B report by global property advisor CBRE.

As the F&B market in the UAE demonstrates a considerable degree of resilience in the years following the economic downturn, the results from the report – which surveyed 22,000 consumers across 22 markets – showed that UAE residents spend on average, approximately AED68 per person, per mall visit – just AED6 behind Switzerland, which took the number one spot for F&B spend at AED74.

Showcasing the importance of boasting a strong F&B offer to mall developers, over half of UAE respondents agreed that they tend to spend more time shopping if they consume F&B in a mall.  The positive ripple effect on retail spend is evident, with 57.4% of UAE respondents admitting to ‘almost always’ visiting shops, while the original motivator behind the visit was consuming the F&B on offer at the shopping destination.

Quantifying this impact, the report found that UAE shoppers’ total retail spend reaches AED208 per person, per visit, positioning the emirate at eighth rank behind the biggest overall retail spenders, Belgium (AED281) and Switzerland (AED287).

“F&B accounts for approximately between 10-20% of the retail mix in Dubai, with this weighting expected to grow to around 25-30% in the next five years, as F&B continues to play a disproportionately important role to shoppers in the emirate,” observes Nick Maclean, managing director of CBRE, Middle East. “The findings reveal that while the location of a shopping mall is key, the retail mix and F&B facilities are also paramount – a crucial insight for developers of new, large-scale shopping malls, who are placing an increased emphasis on creating a compelling, varied and innovative F&B offering as a means to attract retailers and shoppers, boosting retail spend.”

Today, while the market is proving to be more challenging for individual players compared to previous years, the F&B space in the UAE is performing well – underpinned by the disproportionate importance played on F&B as a part of the shopping experience in the emirates, in comparison to other international markets surveyed. According to the report, two-thirds (66.0%) of UAE respondents consider the F&B experience in a shopping mall as ‘very’ or ‘extremely’ important in determining where to visit, while over half of those surveyed stated that stopping to consume F&B is an important part of the experience when visiting a shopping mall.

Of the UAE respondents surveyed, 51% of people want to see more healthy food, while 23% want to see fewer fast food chains.

Changing demand trends among consumers has made way for a greater focus on independent offers and ‘pop-up’ restaurants concepts – with an innovative and increasingly personalised F&B experience at the core of consumers’ desire to see ‘something different’, and not only the ‘established norm’.

“While we seeing a growing presence of international F&B brands in the UAE, there is an opportunity for UAE brands to own a greater share of the F&B market, also exporting their concept overseas,” says Erik Volkers, associate director, CBRE Middle East.

“The UAE is no stranger to international retail concepts, with 55.7% of global brands present here. We are seeing increased ‘appetite’ for home-grown F&B concepts domestically, while there is an opportunity to export these concepts internationally too. With UAE brands such as Wild Peeta and The Noodle House making their mark in global markets, locally inspired F&B concepts are emerging as a key trend, with the likes of Tom & Serg shifting the spotlight to healthy, quality and local restaurant options,” he adds.

“When we opened the first integrated retail destination in the Middle East with City Centre Deira over 20 years ago, we understood the role of F&B in the success of a shopping development. As people’s taste and appetite for F&B evolve, we’ve innovated our offerings to include more F&B options in our shopping malls,” shares Ahmed Galal Ismail, CEO of Majid Al Futtaim Ventures.

“We upgraded F&B options in our leisure and entertainment attractions like ThEATre by Rhodes’ Michelin Star food at VOX Cinemas and our three cafés at Ski Dubai in Mall of the Emirates. We have also created a higher level of dining with unique standalone restaurant concepts next to retail outlets through our Gourmet Gulf partnership. Demand in the UAE for greater culinary experiences will continue and we need to ensure that we are exceeding those expectations to deliver success for both F&B and retail industries,” he concludes.



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