Romeo’s Retail Group is taking a leap into premium grocery retail with the launch of a European-inspired food hall and dining experience in Sydney’s CBD.Located at Brookfield Place Sydney, home to a new 27-floor office tower, the gourmet food concept, known as Locali, will occupy a 1260sqm space on the lower concourse level within Wynyard Station.Locali will target locals and office workers with an upmarket foodie experience that features a walk-in cheese room, butcher and dry ageing room, a commercial kitchen and dine-in restaurant. The marketplace atmosphere continues with a continental delicatessen, Italian bakery, sushi bar, florist, fishmonger and liquor store, where customers can try before they buy. “For an Italian market, we still have other flavours of the world in there,” Joseph Romeo, owner and director of Romeo Retail Group, told Inside Retail. After five years in the works, Locali will open in mid-2021. And with CBD workers gradually making a return to the office, Romeo believes now is the right time for the concept. “We would have loved to have opened sooner but the pandemic pushed things back,” he said. “A lot of the work was done prior to Covid, but we believe that we’ve catered for what the future looks like, and satisfy the needs of today.A taste of the Mediterranean Paying close attention to this changing consumer behaviour, Romeo looked overseas for inspiration and modelled the concept from market-style experiences in Rome, New York and Boston. “It’s a place where you can get a restaurant-standard meal, while having a glass of wine from the Mediterranean or even the Barossa Valley … and you’ll be dining during a food market. I think that’s really unique and very different. You can dine-in but get core grocery shopping products, sourced not only locally but also overseas,” Romeo explained.“It gives a true market and overseas experience which is not found here in Sydney, nor Australia.”Most of the products and ingredients plated up at the restaurant will also be available for purchase in the food hall. Experiential retail is at the heart of Locali’s offer. The food hall offers unique activations such as cooking classes, flower arranging and cheese and wine tasting. But with the city commuter in mind, convenience is also high on the agenda. “Convenience is a big one. That’s definitely front of mind with convenient packs and pre-prepared meals. We’ve thought a lot about the city dwellers but also workers who may want to grab meals on the go,” Romeo said.“We’re really treating this as a one-stop-shop and a solution to all occasions for dining and for shopping.”Power of priceHowever, premiumisation of food and groceries could be risky territory, given Australia’s price-conscious supermarket shoppers, according to Gary Mortimer, professor of marketing and consumer behaviour at Queensland University of Technology. “It’s essentially the process of attempting to make a brand or product appeal to consumers by emphasising its superior quality and exclusivity,” Mortimer told Inside Retail. “Many players, big and small, have tried, but the market is very small. Many would remember Woolworths-owned Thomas Dux. David Jones also indicated a move into this ‘premium’ space, with their food store roll out, however, they have remained tight lipped on its success.”Mortimer also pointed to the recent downfall of Mercado, a luxury, world-class food marketplace in Brisbane that opened in November 2018 but fell into administration about six months later.“Their position was to offer food shoppers the very freshest and finest produce and ingredients Australia has to offer, making for the ultimate food shopping experience and turning the weekly grocery shop into a culinary food journey. They had an in-store patisserie, a massive seafood display at the entrance with a special oyster shucking station and, to the rear, gourmet meat, cheese and deli counters,” Mortimer explained. “It was quite amazing … but well ahead of its time. Unfortunately, for the majority of consumers, when it comes to groceries, price wins.”Romeo is confident, however, that Locali’s balance of quality fare and affordable core groceries will ensure its longevity.“Our store is a combination of both the core groceries at the competitive prices that you’ll find in other supermarket chains, complemented with locally produced and sourced gourmet products. It’s a good balance. Those that don’t wish to buy the super premium items [can avail of] the everyday products which are priced for the consumers looking for value.” Locali has signed up for a 10-year lease term with two further five-year options. Romeo said he is hopeful that the model will be successful in Sydney and can be rolled out in other locations throughout Australia.