Analysis: Do food and beverage brand extensions offer high street hope for retailers?

Come February 2019, Laura Ashley will be represented by its pastoral-chic dresses at the Fashion and Textile Museum’s Swinging London exhibition.

The retailer has come a long way since its inception in the early 1960s. And as well as fashion and homewares, it now has tea rooms. With interiors created by its in-house design department, the classic-contemporary aesthetic is rooted in Middle England. Laura Ashley joint chief operating officer Sean Anglim says: “The tea room will offer guests a contemporary dining experience that is perfectly in tune with our British heritage.”

Laura Ashley's Regency Tea Room
Laura Ashley's Regency Tea Room

Three venues are managed by Corus Hotels and located in their hotels, while the latest to open is at Highbullen Hotel, Golf & Country Club in North Devon.

Laura Ashley isn’t the first retailer to move into F&B (Food & Beverage). But normally this strategy is about setting up cafes in existing stores – think bookshops, L’Occitane and cyclewear brand Rapha. This makes sense, given the state of British retail.


Accountancy firm PwC says a net 1,123 stores disappeared from the country’s top 500 high streets in the first six months of 2018. Hardest hit were fashion and electrical stores.

F&B is relatively resilient in these turbulent economic times, with the coffee shop market growing in turnover by 7.3% to £9.6bn in 2017, according to The Project Café 2018 UK report.

“What this means is that if a brand wants to expand, F&B can be a good way to do it,” says Tom Rhodes, marketing manager of CADA Design. “For the foreseeable future, high street operators are looking for ways to minimize risk, so incorporating a new F&B entry into an existing property could be a good way to test the waters before leaping into unknown territory.” CADA Design has recently created the interiors for Westfield London’s 17,400sqft Japanese food hall, Ichiba from the Japan Centre, which offers homewares, grocery and dining in a single, dynamic space.

Michelle Du-Prat, executive strategy director and cofounder of Household, agrees: “F&B experiences are some of the most shareable, not just in a physical space but also online. Social media has revolutionised the F&B industry and an Instagrammable meal is share-worthy and now the ultimate marketing tool.”

Three-quarters of people who view food photos choose dining destinations based on social media, according to Zagat, 2017; and in 2017, Cassandra described how “modern youth have elevated F&B above other consumer categories because it’s an accessible way to collect share-worthy experiences.”

But Du-Prat and Rhodes warn that a cookie-cutter approach won’t cut the mustard. “Retailers need to… align F&B offers to the brand’s purpose and its shared values with the customer – or now, guest,” says Du-Prat.

Rapha Clubhouses, by in-house designer Brian Macken, tick many of these boxes. “Rapha taps into the social currency of food, creating a social gathering place for cycling fanatics,” adds Du-Prat. “Since converting stores to Clubhouses, revenue has increased four times (according to data and analytics platform Craft), and it has opened up the stores to non-cyclists too, driving footfall and brand awareness.”

The thinking is similar at Laura Ashley Hospitality. A company spokesperson describes the tea room spin-off as offering “a contemporary experience that is in tune with our distinctive design and an atmosphere of relaxed luxury. It also helps to re-engage customers with Laura Ashley and drive them back into stores.”

Du-Prat pinpoints the risks and potential rewards of such an approach: “Is the halo effect enough to drive customers back to the brand to buy without the hard sell? The brand potentially misses out on driving footfall to stores. However, with the help of partnerships, the brand can present itself in a leisure and lifestyle context, building relationships with a new audience and new mindsets. It’s ultimately the mix of social, online, leisure and enhanced retail experiences that is a brand’s new toolkit to reach and connect with customers.”

In terms of delivery, Laura Ashley tea rooms need to reflect the brand and offer the same level of quality and service as the stores. “From a design perspective, this is slightly easier, as we manage the entire design process, so that each tea room is designed in signature Laura Ashley style,” says the company’s spokesperson.

Rhodes is upbeat about the F&B opportunities: “there are loads of opportunities for retailers that want to take bold steps.” He cites Currys PC World stores, which already operate Tech Bars, where customers can sit and wait while their equipment gets repaired. “Why not incorporate a small coffee area where those customers can wait more comfortably with a drink in their hand?” he suggests. Also book, game and record stores could make good candidates for their own spin-off F&B brands, “particularly if they integrate elements from their parent brands. For example, HMV might open a coffee and record bar, allowing music fans to hold listening parties and sip on the latest luxury cold brew.”

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