At the height of the lockdowns, the only thing I encountered on the streets in the early evenings in my part of north London were swarms of scooters and cyclists delivering take-away meals for the cooped-up masses. When things opened up, I confidently predicted the boom in deliveries would subside to pre-covid-19 levels, and the streets would once again be safe from kamikaze couriers.

 

How wrong could I have been? Figures for delivery and takeaway for February were 131% higher than the same month in 2019, according to the CGA & Slerp Hospitality at Home Tracker, and it is delivery that is fueling this growth, as it is almost four times higher than it was three years ago.

 

The service has pretty much become “habitual to consumers”, suggested Lumina Research as it forecast the market will grow by £700m to £13.3bn this year, as an incredible 12% of adults order deliveries at least once a week. These people are most likely to be using the big three aggregators – Just Eat, Uber Eats and Deliveroo – which control a mighty 69.9% of foodservice delivery occasions.

 

The big gun food brands – Domino’s, McDonald’s, KFC, Papa John’s and Pizza Hut Delivery – have an incredible 29% of the delivery market, while KFC and McDonald’s have doubled their shares between 2019 and 2022, to 8% and 4% respectively. 

 

The chunky volumes they command have enabled them to cut superior fee levels with the aggregators compared with other operators. Whereas a small independent might be coughing up a hefty 30% cut, the likes of McDonald’s is shelling out only half this figure. What’s interesting is that, even with this lesser charge, it is hard for the food brands to make a profit on their delivery transactions.

 

Delivery is hard to stack up financially, whichever way you cut it. It’s exactly the same for the retail sector. Even Domino’s, which does not use any of the food delivery platforms and has its own riders, is rolling out a delivery charge following a trial at 150 of its stores. Depending on the franchisee involved and the area, it will set at between 99p and £2.50. In the US, Domino’s also sought to deter deliveries during the busy Superbowl period by offering a $3 credit on future purchases if diners collected their orders rather than have them delivered.

 

Even the mighty McDonald’s has been trying to adapt its delivery model to tip the economics more in its favour. It has agreed an innovative deal in the US with DoorDash, whereby the existing 15.5% delivery charge is being replaced by a sliding scale depending on the speed with which the order is completed in its restaurants. It can be as low as 11.6% and rise to 20.1% if the courier has to wait more than seven minutes in the restaurant. Speed ultimately helps McDonald’s push through greater volumes, and for DoorDash, it enables its riders to deliver more orders in a shift and therefore earn more money.

 

While the big guns flex their muscles and adapt their models, it is sadly the independents who find themselves in a tough position, according to Toby Savill, co-founder of Foodstuff, who suggests it is the smaller players paying up to 35% to the aggregators who are effectively “subsidising” the lower fees charged to the large food brands.

 

His business is looking to fill the gap with a proposition aimed specifically at independent local operators, with charges as low as 12% if they are exclusive on the Foodstuff platform, and a promise of average order values double those achieved with the aggregators. It currently operates in six cities and has a sweet spot of 35 restaurants signed up in each location. By focusing on specific successful local players and having a complementary spread of cuisines, there is a high level of customer experimentation across the brands on the Foodstuff app.

 

Clearly Foodstuff will never be as big as the likes of Deliveroo, but that’s exactly the point. It has its sights set on a specific part of the delivery market and has built its model around helping the independents operate delivery as a profitable revenue stream, which is very hard to achieve with the major aggregators. Even this relatively small part of the market represents a hefty chunk of business.

 

The appearance of players like Foodstuff is wholly reflective of a maturing market and highlights that if delivery is here to stay as a significant feature of the hospitality landscape, and represent a profitable channel for all stakeholders, then it will have to continue to evolve.

 

While eating and drinking sustains the body, it also plays an invaluable role in stimulating the mind and stirring the soul. From the entrepreneurs and innovators keeping the West End’s food and beverage scene very much alive, to the office workers, tourists and Londoners that serve as its inspiration, the sector is all about people. There is nowhere that better exemplifies this than Carnaby, where Shaftesbury is next month celebrating 25 years since its first invested in one of central London’s most iconic landmarks.

The West End has long served many purposes, but Shaftesbury was an early adopter of the idea that, for many, it is all about connecting. The shoppers, the workers, the visitors and the residents have always sought sustenance as part of their time in the heart of the capital. But tastes and motivations have changed over the decades, so staying relevant means not only must we never stand still, but we must also always maintain an informed and evolving understanding of the people that enjoy our villages.

This active asset management is reflected in how we have curated Carnaby over the last quarter of a century. When Shaftesbury first acquired Carnaby, the food and beverage options were relatively limited, with a few pubs and cafés being all the area had to offer. Yet with high footfall and an historic reputation for being at the cutting edge of change in the capital, the direction for Shaftesbury was clear. While Carnaby had to evolve, the opportunity was there to lead the way in London by repositioning it as a place for food and beverage and leisure alongside a revitalised fashion offer. In doing so, we recognised the halo effect of combining complementary food and beverage and retail offers to attract and retain visitors to our villages. 

One of our first initiatives was the pedestrianisation of Kingly Street. Previously a single-sided, unattractive service street, we worked with stakeholders such as Westminster City Council, local residents and our occupiers to take the traffic away. Doing so was transformational, with ownership of the street given literally overnight to pedestrians and operators with the removal of vehicles. This allowed us to engage with a range of new operators that could together create a vibrant hub in which to socialise, with brands such as Pizza Pilgrims, Dishoom, Kolamba and Dehesa all establishing thriving homes there.

Their arrival, combined with the transformational al fresco opportunity that pedestrianisation facilitated – plus additional street-scaping initiatives such as planting, signage and adding eye-catching artwork to building frontages – brought footfall, chatter and genuine enjoyment to Kingly Street as dwell times increased. This is something that remains today and is a very human illustration of the difference food and beverage can make to a city.

As Kingly Street’s reputation grew, so too did the appetite (pardon the pun) from operators for Carnaby more widely. This led to the creation of Kingly Court, an oasis of best-in-class independent food and beverage right in the centre of Carnaby. Originally conceived as a retail enclave, it became evident visitors wanted something different. More specifically, they were drawn to the relative calm of the courtyard setting and were seeking even greater choice of places to eat, drink and socialise. So, we gradually took back units, combined, divided and redeveloped a number of them to create enhanced food and beverage shell units, added extensive communal seating and a seasonal roof, and Kingly Court was born.

From day one, it was embraced by Londoners, commuters and tourists alike, and it’s also fair to say operators have been attracted by the perfect combination of location, specification and opportunity.  It has become a unique food and beverage hub in the West End; a special place full of social interaction due to the seating, the choice and the unique character of the place itself.

We have actively managed Kingly Court too since the day it opened, bringing in new operators to reflect changing consumer tastes and emerging trends in world food and beverage – from Le Bab, OKA and Darjeeling Express to Korean Dinner Party and Imad’s Syrian Kitchen. Most recently, we have added live music and entertainment, with the signing of renowned jazz bar operator Nightjar, which will launch in April.

 

The success of Kingly Street and Kingly Court is also down to another really important dimension to the notion of soul, something that has become even more crucial as a consequence of the pandemic. They are both part of a wider community or neighbourhood. The need to feel connected to, familiar with and part of the places in which we choose to spend our time is more vital now than at any time I can remember in my career. People want to belong, to get something back, and to add something to their places. They also want to share their places with others, hence the desire to socialise as part of any visit to the West End.

This over-riding sense of community, which one finds not just in Carnaby, but in all of Shaftesbury’s villages, is something we work very hard to foster. It is what makes all our villages special parts of the West End. They are not contrived environments whose ownership is remote and disconnected. They are places where people have homes, where they spend significant proportions of their lives. Places where they know the faces, and often names, of the people they interact with. They are places where people can be regulars, but also welcome as a one-off visitor. They are places where the whole Shaftesbury team spends its time. Carnaby, Seven Dials and Chinatown are places where people inherently feel they belong. They are places with a soul.

And that is what the sector brings to the West End. To all cities, in fact. Socialising is the life blood of London. Commerce may pay the bills; art, theatre and music bring the culture; but eating and drinking are what make a city sociable. They are the glue that binds people to one another and the places they choose to spend their time.

That spirit is reflected in some of the more recent additions to Carnaby. Imad’s Syrian Kitchen in Kingly Court is a great example. Imad began as a pop-up but has gone on to establish a permanent restaurant, which has just received a highly coveted Michelin Bib Gourmand. Imad has made Carnaby the home of his business, and the community has embraced him with open arms. The same can be said of Zahter in Foubert’s Place, the debut location for highly regarded “Istanbulite” chef, Esra Muslu.  Esra has created a unique dining experience over three floors that is as popular with Carnaby and Soho’s residents as it is with office workers, tourists and foodies from across London. Zahter adds to the community, bringing something different that has really contributed to the sense of place in Newburgh Quarter.

Both also reflect our approach of choosing individuals to work with, rather than anonymous operators or generic concepts. We have always collaborated with the founders and creators of businesses, helping them to put down roots in the communities they will be part of. Dishoom is one more example of that – we took a leap of faith when we worked with the Thakrar family to open their first ever restaurant in Covent Garden. The success of this site and the relationship we nurtured led to the family opening a 1960s Bombay-inspired Dishoom in Carnaby just a few years later. We work hard to create a sustainable mix of businesses that serve different foods and provide different experiences, but who are united in their desire to be part of something bigger. Consequently, we create communities within communities, with the businesses supporting and nurturing one another. In turn, this sense of belongingness and connection makes the wider community that much stronger. It adds to their soul.

The very human nature of these businesses, and the industry more widely, is what makes them so appealing, and why food and beverage is about so much more than physical sustenance. London’s soul is its food and beverage scene, and its evolution both mirrors and drives how the West End has evolved. It is a wonderful sector to be a part of, and Carnaby is a wonderful example of the value it adds. Although 25 years is quite a milestone, in the context of the West End, it is just a heartbeat. But the fact it is a beating heart speaks volumes about the importance of food and beverage and leisure in giving cities a soul.