Berlin: the location of choice for UK brands seeking international growth

Arabella Dalloz, Managing Consultant and Head of Leisure at CACI

First published in REACT News on 24th April, 2023

As the capital of Europe’s strongest economy, it should come as no surprise that UK operators are eyeing up – and indeed committing to – Berlin, often to kickstart international expansion. The city has long been considered attractive and unique, with a vibrant culture scene to match. Beyond just reputational value, it manages to tick every box when looking for the foundations every business needs to see, to be confident of success.

Berlin is after all a growing and evolving city, attracting over 13.5 million visitors a year[1], but clearly prides itself on being just as accessible and interesting for local people. Apart from the obvious factors which are pulling F&B operators into the capital – its resilient economy, cultural significance, and affordability – there are some key reasons why Berlin is seen as a solid, strategic decision for international growth, fuelled by a thriving catchment with burgeoning spend potential.

Magnifying in we see Potsdamer Platz as seemingly the go-to place for UK, and indeed European, operators. The centuries old landmark square boasts obvious strength at street level, attracting high footfall from nearby stations and offices, with bars, cafes, restaurants, theatres, cinemas, hotels, and casinos. So it seems a no brainer; Potsdamer Platz is a great location when looking from a macro-level, whether you specialise in casual or fine dining, or have a unique and sought-after leisure offer. However, it’s not just about the location, but the people in it, and it’s important to get to the root of why opening there is beneficial for a predominantly UK-based company.

There are over 4 million people living within the catchment of Potsdamer Platz, and our Retail Markets model points to over €50 million in potential catering expenditure being drawn to the site by these people. The key finding: Pre-Family Couples and Singles make up the majority of this catchment at 64%, compared to the German average of about 28%, representing a massive over-index. This highlights great opportunity; these groups are perfect targets for a vibrant and eclectic hospitality offer and are likely to have a higher propensity to spend on food and drink. Add this to a fantastic international tourist population and you can start to see why major operators have decided that this is the location for them.

That all sounds ideal for any growing brand, but why specifically does it work for UK-based operators? In short, Potsdamer Platz attracts a very similar demographic and visitor profile to London’s West End. Both leisure markets are very similar, dominated by a mix of mass market and ‘accessible premium’ brands; both destinations gain significant tourist income, the West End achieving almost a 50% uplift in spend from this source; and both benefit from nearby workers, from prominent corporate headquarters nearby. The catchment pull of similar locations in the West End may be larger than Potsdamer Platz, but with just over half (51%) of its visitors forming part of the consumer groups that really drive leisure spend, there’s another clear affinity with the Central Berlin audience.

It seems UK businesses have noticed the potential and similarities. KERB, a London native currently operating the buzzing Seven Dials Market, announced earlier this year that it will be opening its first international location in Berlin[2], housed within the Sony Centre in Potsdamer Platz. Creative bar concept The Alchemist, which started life in Manchester but now has five sites in London including one in Covent Garden, is also set to open there in spring 2023[3]. Success in London’s hospitality core may or may not be their main motivation for the move, but the numbers suggest it certainly could be.

Berlin isn’t just pinching the best of Covent Garden, however. Manifesto Market opened the largest food hub in Europe within Potsdamer Platz in January[4] following its success across Prague, with Jamie Oliver also joining forces with BMB Gruppe to open more than 30 hospitality venues in Berlin with a franchisee model, its first site planned for summer 2023[5]. The opportunities are there for a wide range of concepts.

Numerous operators are attracted to Berlin, and quite rightly, with Potsdamer Platz radiating confidence in its catchment and location. The data shows that this move is solid in its foundations and exciting in its potential, and it comes as no surprise that UK businesses looking to make the hop overseas have recently gravitated to Berlin. It simply combines a cool character with value in growth and familiarity in its visitors; if your F&B offer works for the West End visitor, you’ve got a good chance in Berlin.

With the German capital’s thriving tourism and vibrant catchment, there seems no better time than the present to make the move.

[1] https://www.berlin.de/sen/wirtschaft/en/economics-and-technology/branches/tourism/#:~:text=Today's%20Berlin%20attracts%2013.5%20million,the%20top%20city%20break%20destinations.

[2] https://www.bighospitality.co.uk/Article/2023/01/23/street-food-market-operator-KERB-to-open-Berlin-food-hall

[3] https://www.bighospitality.co.uk/Article/2022/11/18/the-alchemist-chooses-berlin-for-first-international-site

[4] https://www.across-magazine.com/manifesto-market-announces-to-open-in-berlin-germany-on-january-24-2023/

[5] https://www.bighospitality.co.uk/Article/2023/02/09/Jamie-Oliver-Kitchen-to-open-in-Berlin-as-part-of-new-franchise-deal