Millennial expenditure in the restaurant industry has left the independent and small regional chains at a loss with rapid changes in the food and beverage sector. Four emerging trends are expected to have a significant impact on both retail and industrial food and beverage operators include:
• Urban neighborhoods turning into food and drink hotspots,
• Growth of single-person households that drive more restaurant spending,
• Restaurant and grocery expenditure will eventually outpace soft goods, and
• Millennial food and beverage expenditure will rise rapidly over the next ten years.
Millennials spend a large percentage of their disposable income on dining as a result of demographic shifts, resulting in new lifestyle habits that inculcate the practice of dining out as a means of having fun. Besides demographic shifts, advancement in technology like food photographed on social media also boosts the popularity of restaurants and fine dining.
As emerging trends have a significant impact on retail real estate, owners are adapting to the changing consumer demands by providing non-department store shopping center restaurant floor area. New retail concepts come with built-in dining areas, utilities, and dedicated parking for delivery services through the developer’s response to the changes.
The supply-demand graph of restaurants has stimulated new industrial growth, as home delivery operators quickly lease industrial space to support restaurants in managing online orders. Restaurants are beginning to shift their delivery service from onsite to off-site facilities to meet customer expectations, and the additional food demand is being catered to by the increasing number of kitchen start-ups.
The changes in the restaurant and home delivery industry have become so significant that dedicated parking stalls are being provided by landlords that are set aside solely for pick-up and delivery services. Some of the most popular and productive restaurants in the U.S. are located in shopping centers--the center location is crucial to their success.