The UAE’s food and beverage (F&B) market is showing little sign of the recent softening in retail revenue, according to a new report.
The UAE was ranked as the third-biggest spender on F&B, spending about Dh68 per mall visit. It came in behind only Norway and Sweden, research from the property adviser CBRE showed.
It found that two-thirds (66 per cent) of UAE respondents consider the F&B experience in a shopping mall as “very” important in determining which mall to visit.
“It seems that the F&B sector, in the malls, has held up against the strong headwinds of economic change,” said Nick Maclean, the managing director of CBRE Middle East.
“We expect the weighting of F&B in malls to grow from 10 to 20 per cent to 25 to 30 per cent in the next five years. While the location of a shopping mall is key, the retail mix and food facilities are paramount, as a varied F&B offering is a means to attract retailers and shoppers, and to boost retail spending.”
While F&B is obviously a key attraction for many mall visitors, not all outlets are successful, though the number of F&B outlets closing in UAE malls is hard to ascertain.
Mohammed Al Shaiba Al Mazrouei, the director of Al Hail Holding, which runs Abu Dhabi’s Dalma Mall, said that the mall had 60 F&B outlets last year with no closures.
The Majid Al Futtaim Ventures chief executive, Ahmed Galal Ismail, refused to comment on the number of unsuccessful F&B ventures in Mall of the Emirates (MoE), but said the new extension “with 80 brands wanting the 12 vacancies” is showing strong demand.
One new entrant into the new MoE extension, Common Grounds, a spin-off from the home-grown concept Tom & Serg, explained the business pressures on F&B in MoE.
“Business isn’t as good as we expected it to be,” said Sergio Lopez, the co-owner and founder of Bull & Roo Hospitality and Investments, which owns the restaurants. “MoE is a tourist destination. The Russians aren’t there any more and the Chinese have stopped coming, so that is a huge swathe of people missing from the mall.
“I know restaurants are hurting as people tighten their belts and move to casual dining. We aren’t feeling the lower basket price because our average spend is only Dh75, but we are feeling the lack of footfall. Rents are high but we are willing to wait it out and see if the tide turns.”
Follow The National’s Business section on Twitter