Alibaba’s “Singles’ Day” online shopping carnival, held on the 11th of November each year, hit a record RMB 35 billion in sales this year, which is equivalent to about a month’s retail sales here in Hong Kong. The company claimed that, outside of mainland China, the promotion was most popular in Hong Kong. The threat of e-commerce only adds to the challenges faced by traditional retailers, who are already dealing with a slowing inbound tourism market and tightening per capita spending of mainland Chinese tourists in Hong Kong.

In recent years, the Holy Grail for traditional retailers has been finding a means to draw shoppers back from the virtual world. One approach has been merging general retailing with a food and beverage offering to enhance the overall shopping experience. Though this concept is not new to Hong Kong, we have seen a growing number of general retailers open new hybrid stores in recent years; either providing the food and beverage offering by themselves or through a partnership with a more established operator.

Figure 1: Examples of F&B offered by retailers

With a local population that loves to dine out together with high levels of business entertainment, the city presents a thriving market at almost every price point. I believe that the trend for retail brands spinning off or merging with food and beverage operators will only gain in popularity. This trend is expected to spread along with the increasing supply of shopping centres outside of core locations, such as Yuen Long and Tseung Kwan O in the New Territories, targeting more towards the local mass-to-mid end market. The increase of the resident population in these areas will steer demand growth and provide opportunities for retailers to bring their creativity into full play in venturing into the food and beverages business.

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