Covid-19 Daily Briefing

Daily briefings on the most relevant news affecting our industry from the past 24 hours.

Consumerism - Is Gen Z really ‘leading the way?’

If the headlines are to be believed, Generation Z (Gen Z) are progressive environmental activists who place sustainability above consumerism.

This can be seen in surveys: according to CNBC, more than half of Gen Z – or ‘Zoomers’ – were said to be looking for environmentally sustainable products. Meanwhile new Drapers research revealed more than three-quarters of Gen Z (and millennial) shoppers say that sustainability is important to them. 

Given these are the customers of the future, businesses are taking steps to show that their brands closely align with these green values.

Last year, young fashionista favourite ASOS announced a 30% reduction in their carbon footprint while iconic jeans brand Levi Strauss pledged a 90% reduction in greenhouse gas emissions by 2025.

Given Oxfam research found that the carbon footprint of new clothes bought each month in the UK was greater than flying around the world 900 times, carbon-cutting initiatives like these should be welcomed with open arms.

The fast fashion industry – which goes out of its way to target younger shoppers – is estimated to produce 1.2 billion tonnes of CO2, a figure exceeding that of international flights and shipping combined. 

But are Zoomers quite as progressive as they make out? The same CNBC survey that showed more than half of Gen Z customers were said to be looking for environmentally sustainable products, only 38% were willing to pay more for them. 

There seems to be a disconnect between what consumers say they want, and what they are actually willing to buy.  This isn’t just limited to demand for sustainable products either.

Following the Boohoo factory scandal in July last year – where warehouses were revealed to have poor health and safety records and workers were being paid below minimum wage – the company’s share price deservedly fell by over a third in the two days following the news. 

Yet the backlash seemed short lived. Just a few months later, Boohoo reported a sales surge, with half-year revenue growth of almost 50% at the end of August. Clearly customers had no long-term hesitations about continuing to shop there. A Vogue Business report found that of 105 Gen Z participants surveyed, over half were said to buy ”most of their clothes” from Boohoo and other fast-fashion retailers. 

While there may be an argument that younger consumers are out-priced by expensive sustainable fashion brands, this is not a strong one as the resources and technology are out there to help Gen Z in making informed decisions over choosing to shop at ethical brands over unethical ones. 

The continued success of brands like Boohoo and Primark, which are known not to prioritise ethics or sustainability standards, shows that in reality many consumers are relatively apathetic when it comes to choosing to shop at more conscience-driven brands, and remain attracted to cheap and convenient fast fashion. 

Primark has long remained a brand shrouded in controversy, claims in 2013 revealed they had Bangladeshi factory workers paid less than £24 a month – this came to light around the time a Primark factory was in such bad condition it collapsed, taking the lives of 1000 people.

Consumers are quick to call out corporations for their ethical and climate change policies (or lack of), claiming that they are not doing enough to help. Yet major businesses from Unilever to BlackRock are at least beginning to take strong stances on sustainability and ethics.

While this is undoubtedly motivated in part by what they believe will be best received by their customers, meaningful change is made harder by ‘woke’ consumers who demand one thing and do another. Time for Gen Z to put its money where its mouth is. 

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Cheque please! Is casual dining on its way out?

Is it just me who’s getting hungry every time I check the news? Last month’s financial woes at Pizza Express and the uncertain merger between Just Eat and, described as a feeding frenzy by the FT, have both seen images of mouth-watering meals popping up all over the place.

Yet, behind these images are some decidedly less-appetising sights; closed stores, lost jobs, a gig-economy workforce, and ultimately, an even more barren high street. 

What’s driving this change? 

Pizza Express have blamed a lot on their  £1.1bn of debt . But while juggling masses of debt is perilous enough for any business, the restaurant industry also faces Brexit making hiring EU workers harder, sky high business rates, and perhaps the most important factor of all: changing consumer tastes. 

For example, Pizza Express isn’t the only Italian chain folding like a calzone. Jamie’s Italian went bust in May and there have been recent store closures at Prezzo, Strada, and Carluccio’s. Is it just that the UK’s love affair with Italian food is over?

The issue is in fact more widespread, and affects the entire food and beverage sector. This is why we’ve seen Gourmet Burger Kitchen and Byron struggling to keep their sites open, and a quarter of the UK’s pubs close in a decade.

The problem, it turns out, isn’t with the food, but with the reduced demand for casual dining experiences. 

The “casual dining crunch” is nothing new, but the aggressive expansion of delivery services like Deliveroo, Just Eat, and UberEats have pushed it into overdrive, much in the way Amazon, eBay and other e-commerce platforms have driven traffic away from the high street to online.

This has even led more and more eateries to divert their attention towards delivery offerings using so-called Dark Kitchens, small off-site kitchens in temporary buildings which are shared by restaurant chains to afford them delivery access to a new area, letting them avoid setting up a restaurant space.

So, with casual dining on the out, what’s next for food and beverage?

Those who prize convenience will continue to order their meals online. But people who want quality go out and spend a little more at high-end eateries that offer more than just food. The key buzzword here is experiential.

As tastes turn towards unique, unfamiliar, and instagrammable experiences, a run of the mill, bog standard restaurant setting that you’d  find in any town is no longer cutting ice. Already, customers are turning to previously unconventional cuisines, which has led the vegetarian, Caribbean, Turkish, and Middle Eastern restaurants sectors to each grow by well over 60 percent in the past five years.

It is also why we’re seeing more and more hipster pop-ups and organic food markets drawing huge numbers.

In London alone, sites such as Boxpark in Wembley or Coal Drops Yard at King’s Cross are hosting hubs of smaller, concept-driven restaurants. Offering popular trends such as street-food stalls, artisanal vendors, and curated eating experiences, these sites are creating dining experiences that younger consumers can’t get enough of, to say nothing of their events.

Build-to-rent developers have also grasped this, understanding that as a service asset they need to provide their tenants not just a home, but an experience and lifestyle. At Manchester’s Angel Gardens, BTR developer Moda Living has partnered with Pot Kettle Black, an Australian-style coffee and brunch café that will host wellness-themed events and provide F&B services to residents.

Our advice to developers and property managers would therefore be to not be afraid to roll the dice on a lesser known or local restauranteur with a unique, quality offering – they’re likely to do far better than the alternative. I, for one, can’t wait for the resulting success stories – all this talk of food has me ravenous.