Joao Garcia, head chef of Butcha Steakhouse and Grill believes that the food and beverage industry is set to take over the shopping industry in retail space, not just within the UAE but globally too and here he explains what factors could lead to the shift.
Over the past few years, the retail sector in the GCC region has experienced some turbulent times. Luxury retailers have taken a hit due to falling oil prices and a drop in the footfall of wealthy tourists from China and Russia. However, F&B retail has continued to thrive, with more than 16,000 restaurants currently counting Dubai as home.
The city has a truly dynamic culinary landscape that would appeal to the most discerning epicures. Where once there was simply a surfeit of fast-food chains or high-end eateries, there is now a strong culture of chic, yet casual dining that seeks to whet the appetites of those keen to sample some in between dining options. Today, stand-alone restaurants across the country cater to every palate and price point. Speciality restaurants of varied shapes and genres are ubiquitous in Dubai’s malls and hotels as well as the country’s outdoor, urban destinations such as City Walk that caters to millennials and tourists alike.
According to a report by Jones Lang LaSalle (JLL) and the International Council of Shopping Centres (ICSC), eateries in major Asian cities including Abu Dhabi and Dubai could make up nearly 30% of the total retail space by 2025, surpassing the global average, as young adults prioritise eating out with their friends over buying the latest pair of shoes. Furthermore, the amount of space occupied globally by food and drink retailers is set to grow to 20% over the next eight years, up from 15% of all retail space today.
In the UAE, the key contributing factor for this surge is the hike in the number of tourists visiting the country. A consistently growing tourist segment has added to the burgeoning demand for diverse cuisines across the Emirates, including all vegan and gluten-free menus. Also fuelling this trend is the preference of young consumers to indulge in new experiences over more material commodities. Several of the UAE’s residents have among the highest disposable incomes in the world and regularly keep abreast of international food trends. This has created a culture of dining out, with gourmets in this metropolis ever ready to embrace the next big outpost of a fancy Beverly Hills café.
But no matter how good your burrata is, for a restaurant to be truly successful, it must have the right location, price-point and business model. The quality of the food should speak volumes as should the overall experience. It needs to delight and capture the imagination and attention span of a generation that has seen it all and lives in one of the world’s most competitive culinary destinations. Additionally, it should mould itself to their needs, that are largely technology focused.
I have no doubt that going forward there will be more investment in online F&B retail offerings, the impact of this segment is truly all pervasive. Studies have shown that consumers prefer to shop online mainly because of the lower prices, wider product selection and greater convenience, which are behavioural patterns that will certainly not leave the F&B segment untouched.
