Luxury houses feast on food
Food is the new luxury, if premier London store Harrods has got it right.
Harrods’ famous window displays have been taken over by its Food Halls this month (March), for the first time in the store’s history. The windows showcase some of the store’s exclusive and limited edition products across the confectionery, tea and pantry categories. And the store will be opening an Italian truffle lounge in April. The Tartufi & Friends lounge will serve a truffle dishes, including tartare of Fassone beef with quail eggs and fresh truffle, and truffle martinis. There will also be a range of Tartufi & Friends packaged goods such as limited edition extra virgin olive oil with white truffle. Food is not new for Harrods, but this push into prime position marks a trend which is seeing a number of luxury houses embrace food.
Food is the new fashion
Within the last year Prada has bought the Milanese coffee and cake house Pasticceria Marchesi, Diesel and Marni boss Renzo Rosso bought organic food chain BioNatura, and LVMH bought another pasticceria, Cova. LVMH is reported to be planning further international expansion for Cova, which already has franchises in Japan, Singapore, Hong Kong and China. Prada has plans to roll out Marchesi chains in Dubai, Hong Kong and Tokyo. Other fashionistas are hitting the bottle. Gaetano Marzotto, behind Valentino and Hugo Boss, has launched a premium wine brand Ca’ del Bosco, while wine labels Il Borro and Castiglion del Bosco are new brands for shoemakers Ferragamo.“Food is emerging as a new frontier for luxury goods,” the Financial Times announced (23 December 2014). Premium food and drink has become a feeding ground for investors looking to jump into growing US and European interest in eating well, and changes in Chinese food consumption habits, it said.
Consumers go high-end
High end food and wine is one of the categories set to benefit from category spend shift, as consumers move to different product and service categories as they gain in experience of the luxury sector, according to a report by Exane BNP Paribas (Luxury Goods, 6 February 2014). The report also identifies growth in individual travel, high-end education, fitness and wellbeing; “In other words, all services and products associated with greater refinement and sophistication beyond personal luxury products,” it says. The idea is that those who dress and furnish their houses in luxury products, will start to apply the same standards to the food and wine they consume.
Fortnum and Mason gets results
Fortnum and Mason has tapped this trend with terrific results. Its Christmas trading figures showed a 22.8 per cent increase in sales from the same five-week period the previous year. Like-for-like sales were up 18.3 per cent, and online sales increased by 31 per cent.
Products offering the allure and exclusivity to entice the luxury customer included a leg of Ibericos Maldonado Albarragena ham complete with a specially designed Swarovski crystal ankle band and a £1,950 price tag. Both this and the ‘standard’ ham at £1,150 came with its own carver who would travel to your home on any day except Christmas Day “to carve the ham with the expertise that it deserves”. In Christmas trading caviar sales were up 42.2 per cent year on year, while hampers and hand-made chocolates also saw double digit growth.
Fortnum is also in expansionist mode, having opened three new outlets last year, at Heathrow airport, London’s St Pancras International Station, and a licensed store in Dubai – the first new outlets in its 300 year history. Latest quarterly results at its St Pancras store are “ahead of expectation for the business”, the store said, with 42 per cent sales growth year on year for the period of November-February. Its best performing category was tea, where Fortnum said sales were 61 per cent higher than expected. Wines and spirits also sold well, with sales 12 per cent above Fortnum’s forecasts for the November-February period. Meanwhile caviar, stilton and chocolate truffles are the standout performers at its Heathrow Terminal 5 store.