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Leisure & hospitality savior of the high street

Chaiiwalla, Awesome Chips, Crispy Dosa and Taco Bell are relatively recent additions to my local high street in North London and it has been announced that US-based QSR brands Wendy’s and Wingstop will soon be opening new units in the N8 postcode. 


The face of the UK high street and also shopping malls is undergoing something of a transformation involving the ongoing shift away from the focus on traditional retail outlets towards having a much broader mix of operators. This very much includes leisure and hospitality, which we could argue represents the future of these environments.


The future of Retail


The redevelopment of old shop units reached a new high in 2022, with over 10,700 repurposed, compared with 9,100 in 2021 and 7,300 in 2019, according to the Local Data Company. Many of these units were converted into more leisure-focused propositions because consumers are increasingly demanding such experiences when they venture out. What is making this conversion easier is the introduction of the Class E property classification, which has allowed food-focused operators to benefit from relaxations in planning laws.


New Opportunities 


This has opened up many opportunities and we can see the effects across the UK with the number of leisure units rising by 2.1% in 2022 across the country’s top 650 town centres, which compares with a reduction of 1.3% for retail shops in that year. Many landlords are seeking out food halls, cafes, restaurant concepts and entertainment venues to occupy former retail units. One particular growth area worth highlighting is the drive-thru, which has seen over 50 new outlets open in 2022. Demand is incredibly high for the best locations with as many as nine competing bids reportedly battling for the prime sites.


Mark Fox, CEO of Roadchef, informed me that he now has Costa Coffee drive-thrus operating at 24 of his 30 motorway service stations and that after the first McDonald’s drive-thru opened on a Roadchef in Durham in 2019 there are now three in operation and more are planned across the portfolio.


Whatever changes we have seen on our retail landscape to date is nothing to what we can expect in the future because it is forecast that as many as 40% of all shops must be repurposed within the next five years, according to a survey by Revo and Lambert Smith Hampton. As many as 61% of property-related organisations and businesses surveyed believe that between 20% and 40% of retail space needs to be reinvented as leisure, hospitality, health or civic use as it predicts the demand for buying goods through physical shops will continue to wane as people transact more online. 


Indicative of this waning demand for regular shops is the wish-list of outlets that people would include on their perfect high street. The top 15 comprises: bakery, Post Office, restaurant, coffee shop/Café, clothing shops, supermarket, cake shop, book shop, butchers, pub, card shop, takeway, library, hair salon and gift shop. What is incredible is how few traditional retail outlets are on this list. I’d argue that only five fit into the definition of a typical store, which very much shows the direction of travel of what people want in their local areas.


Final Words


It’s clear there is much evidence to support the argument that the opportunity for leisure and hospitality operators looks to be extremely strong over the next few years. The sector looks like it is increasingly gaining the upper hand over the retail industry when it comes to gaining a greater presence on high streets and within shopping malls. 


It is up to the QSR players and other foodservice operators to take advantage of this attractive backdrop that in a ways slightly offsets some of the many challenges that the industry currently faces.


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