Fashion shopping in Hong Kong

Hong Kong malls switch from targeting luxury buyers to feeding hungry shoppers

Great example is Pacific Place in the prime Admiralty district, which added 10 new food outlets in the second half of 2016, boosting the F&B footprint of the mall by 50 per cent at the time

PUBLISHED : Tuesday, 02 October, 2018, 1:01pm
UPDATED : Tuesday, 02 October, 2018, 8:09pm

The growth of online retail has caused a serious headache for shopping complexes in recent years. But there is one area where digital outlets cannot hope to compete: food and drink.

Because of this, shopping centres in Hong Kong have been allocating more space to meet the needs of hungry shoppers.

“At this time, F&B [food and beverage] is very important because it can drive customer flow. When there is customer flow, there are sales,” said Theresa Leung, general manager of Pacific Place, one of the city’s best known malls. “People like to come out for meals.”

F&B accounted for half of all new entrants into the market this year, a trend seen lasting at least throughout the year, according to global property services company CBRE.

Pacific Place, in Hong Kong’s prime Admiralty district neighbouring Central, added 10 new food outlets in the second half of 2016, boosting the F&B footprint of the mall by 50 per cent at the time.

Today the giant 711,000 square foot site has 28 F&B outlets, almost a fifth of its tenant mix. Together with lifestyle and leisure outlets including a yoga studio, hair salon and theatre, these account for a third of the shops in the mall.

And it aims to welcome 10 new tenants by the end of this year, including two more food outlets.

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It credits this new emphasis on refreshment and lifestyle with helping sales grow 21.7 per cent in the first half of 2018, an eighth straight quarter of growth.

“Our customer requirements for living have changed,” said Leung. “Lifestyle has been integrated into retail.”

The 10 new tenants include new casual Asian food concept Sun’s Bazaar and Japanese retailer Muji among its ranks.

“People like to go out for meals,” said Leung. “We hope to provide a range of F&B offers at different prices.”

Joe Lin, executive director for advisory and transaction services for retail at CBRE Hong Kong, added that a decade ago when the luxury boom had just begun, shopping malls gradually began to incorporate luxury elements, eliminating many of the mass-market fashion chain stores.

Our customer requirements for living have changed. Lifestyle has been integrated into retail
Theresa Leung, general manager of Pacific Place

“But now, as the luxury trend goes downhill and online retail picks up steam, they bring in elements that the market needs.

“Nowadays people expect more gimmicks and other things from shopping malls that can’t be found online. That is what the market requires.”

Other landlords have also added more lifestyle and food and beverage outlets to their tenant mix, part of a larger trend for shopping malls in Hong Kong, according to Cathie Chung, national director of the research department at JLL.

While there are still luxury shops in Pacific Place, and a new Shanghai Tang boutique opening in November this year, Chung thinks they are consolidating or switching some of the existing tenants into more lifestyle and food and beverage services.

“The reason for increasing the lifestyle and food and beverage offerings is mainly because those are considered anchor tenants, and can attract more foot traffic,” she said.

“This enhances the shopping experience.”