Consumer behaviour – key retail and restaurant sector trends for 2022

The pandemic forced the retail industry to quickly adapt with more high street businesses opening online, click and collect orders continuing to gain popularity and expand. Consumers became completely connected with the convenience of online sales and quick delivery regardless of the sales channel they were using. It seems that these retail trends are here to stay but as the rollout of the vaccination programme continues and our high streets reopen for trade, are consumers getting more comfortable with being in person again?

We’re sharing observations that we’ve gathered through working with clients in the Scottish retail and restaurant sector in recent months to help you ascertain some of this year’s most prominent market trends.

How must retailers adapt?

To succeed in the future of retail you need to enhance not only your online offering but also enhance your in-store experience making it more memorable, offering unique services, highly trained in-store staff and using technology to ensure a consistent shopping experience across all channels whether it be online or offline.

What does this mean for the property industry?

We’re likely to see shorter, less expensive and more flexible lease terms with the likes of pop up shops, short term commercial leasing, and allowing new entrants to the market to test physical retail. According to Shopify, “in the United States 81% of Gen Z consumers prefer to shop and discover new products in store and more than 50% use in-store browsing as a way to disconnect from the digital world”.

Consumer expectations are changing

The demand for quick convenience and speedy delivery continues to grow and put pressure on businesses as to how they meet this demand. As more and more restaurants expand their food delivery offering through online apps, we’re seeing operators such as McDonald’s having to refit many of their restaurants to better cater for and enhance the customer experience for both the walk in customers and the now huge online delivery demand. Other operators including Scotmid have recognised that reliable delivery is now an essential part of business for any food retailer. As this is here to stay, they’ve teamed up with online apps to guarantee customer delivery of shopping within the hour.

This is proving to be very popular and successful across their Scottish stores as another way of connecting with and serving their customer base. Free and fast delivery has a significant impact on purchasing decisions according to a commission for a consulting study conducted on behalf of Shopify, which found that 75% of global shoppers want free shipping, while 58% of consumers expect free next day delivery. Indeed, 68% of shoppers also want to know the estimated delivery date upfront, something that they find valuable when making purchasing decisions.

What about physical retail space?

For those returning to the high street it is not just finding space, it’s finding the right space in the right location and at the right size. Such optimal space is still in high demand and we have witnessed this with the return of Gordon Ramsay opening his first restaurant in Edinburgh’s ever popular St. Andrew’s Square under the Bread Street Kitchen brand. The return of Gordon Ramsay’s brand to Scotland has been hugely successful and it’s worth noting that even during the 2021 pandemic there was still huge demand for that optimum restaurant space, which only became available due to the outgoing tenant entering into a Company Voluntary Agreement (CVA).

Wellness trends to continue

In 2022 we are likely to see the focus on healthy living continue through the current wellness food trends. As we came out of lockdown, the desire for some to readjust their eating habits and opt for more healthy food has been significant. In 2022 we can see many new restaurants open up new ‘functional food pairings’ that have a positive impact on their physical health and wellbeing. Restaurants such as Choppaluna, Dishoom and Wagamama and many more will be embracing and innovating their menus to adapt to this trend.

Consumers continue to be increasingly conscious as to the source of the products that they purchase, and millennials in particular are seeking out brands which align with their values. This has led to a growing sense that a brand’s social responsibility and reputation has at least some influence on their purchasing decisions. So, offering transparency into your business practices, good employee treatment and retention, and the organisation’s social and environmental awareness is important. It can help to grow trust in your brand while also increasing customer loyalty and advocacy. Many in the retail and restaurant sector are already doing this, and many more will continue to follow suit.

If you would benefit from strategic advice as to what comes next for your retail business, whether it’s at the start up stage, considering expansion or adaptation, or perhaps looking to begin winding down, our commercial retail legal experts will be happy to help.

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