CBRE: Food courts remain a lifeline for malls
published : 21 Jul 2020 at 04:00
newspaper section: Business
Despite accelerating trends moving shoppers away from brick-and-mortar stores and towards e-commerce, food courts have remained a vital magnet for malls to attract shoppers on a budget, says real estate consulting firm CBRE.
Food courts are commonly packed with office workers during lunch breaks, then replaced by students hanging out after school for dinner.
As food courts generally offer quick and affordable meals, they have been the perfect destinations for those looking for budget-friendly alternatives to the more pricey restaurants in malls.
With the growth of food delivery services, consumer behaviour has shifted online, leading to fewer visits to brick-and-mortar stores.
"While general food court operators have managed to maintain foot traffic by improving the atmosphere and services, major ones are more keen on giving customers a new dining experience at food courts to differentiate themselves by leasing space in their food courts to a variety of Bangkok's most renowned street food vendors to drive customer traffic," said Jariya Thumtrongkitkul, head of advisory and transaction services for retail at CBRE Thailand.
Bangkok's reputation as one of the world's top street food cities is undeniable.
Euromonitor International reported the street food market in Thailand was worth 276 billion baht in 2017 and is expected to increase to 340 billion by 2021, an average growth rate of 5.3% per year.
Despite the growth of the street food market, vendors often lack professional management and may face difficulties in approaching customers because of inferior locations and staggered operation hours.
The combination of street food vendors with a food court model could lead to a win-win situation where retail developers could bring in more footfall while street food vendors could strengthen their businesses in the long run, according to CBRE Research.
In 2014, Central Pattana (CPN) introduced "Eathai" at Central Embassy, an upscale food court, offering 56 Thai food booths ranging from famous restaurants to street food joints from all four regions across the country.
In 2018, CPN launched "Foodworld" at CentralWorld, offering more than 600 unique Thai menu items for customers to experience from famous restaurants and street food stalls.
The Mall Group also launched Gourmet Eats at the Mall Ngamwongwan with stores listed in the Michelin Guide in July 2019.
In September 2019, MBK partnered up with Samyan Mitrtown to operate the Samyan Mitrtown food court with 17 renowned street food restaurants.
I'm Chinatown, the on-site retail component opened in January of a mixed-use project developed by Grand Uniland, offers famous street food from vendors all over Bangkok, especially from the Chinatown area, to attract both locals and tourist customers on the ground floor and second floor.
In the post-pandemic era when more safety and hygiene standards will be needed, food court operators must adapt to stiffening regulations and consumer expectations.
CBRE Research expects redesigned seating arrangements to create a new ambience.
Setting up private group corners and installing plastic screens might not be enough in the long run.
In CBRE's opinion, food courts will have to adapt to compete with the ever-changing retail landscape and consumer behaviour.