California Centers Magazine serves retailers, developers, shopping center owners, investment sales brokers and tenant representation firms throughout the state of California.
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14 California Centers Magazine | May 2015 C C T he concept of retailer restaurants may have been around since the early 1900s, but it's only recent- ly gained favor in the 21st century. What began as tea rooms and em- ployee-style cafeterias has evolved into cofee bistros, power lunch spots and the perfect place to grab a drink — and maybe a new tie — after work. "For many decades, department stores had their own generic restau- rant, café or cofee bar," says Howard Wong, director of retail leasing at Ir- vine-based Passco Companies. "As consumers today become increasingly sophisticated, however, they continue to demand increasingly sophisticated retail experiences and food oferings. Full-service dining is quickly becom- ing the future for retailers." While retail sales fell for the third consecutive month this past February, decreasing by 0.6 percent, according to the National Retail Federation (NRF). Sadly, February's numbers were an improvement when compared to Jan- uary's and December's drops of 0.8 percent and 0.9 percent, respectively. Department store sales were hit particularly hard, declining 1.4 per- cent this past February. NRF noted consumers didn't seem interested in spending the money they had saved on lower fuel prices on retail purchas- es. Many also didn't want to venture out in cold weather. Then there are perhaps the two biggest roadblocks to a retailer's success: online shopping and the trend toward acquiring expe- riences, rather than objects. Both challenges are widely em- braced by today's most infuential de- mographic, the Millennial, who val- ues not just good times, but their time in general. "Fashion and food have been in- formally paired for some time, but certain target segments of the buying public — namely, Millennials — are seeing some of their favorite gourmet cofee brands being featured along- side their favorite fashions," says Der- rick Moore, a principal in the Urban Retail Properties division of Avison Young's Downtown Los Angeles of- fce. "Retailers realize that by pairing the two, they can create or increase the 'shopping ad- hesive' needed to keep shoppers in their stores a bit lon- ger. Consumers will pay for convenience and access. Having these outlets easi- ly accessible, saves time — and time is money. Consumers will pay for the abil- ity to multi-task and have their favorite eats alongside pre- ferred fashion brands." PERKING UP STORE SALES The retailer-restaurant trend had a modest resurgence in California, where options were typically limited to cofee bars attached to Nordstrom stores. It picked up steam, however, in 1989 when the company's largest store at the time, a 350,000-square-foot Nordstrom fagship that included four restaurants and a British pub, opened at San Francisco Centre. Nordstrom still holds a great deal of brand awareness when it comes to its food oferings, which range from wine bar cuisine at Blue Stove in San- ta Monica Place to cofee shop snacks at Ebar espresso bar at Paseo Nuevo Shops & Restaurants in Santa Barbara and its well-known Marketplace Café at centers like Stoneridge Shopping Center in Pleasanton. Marketplace Cafés throughout the state have built such a loyal follow- ing that its Roma tomato basil soup is now sold in a jar over the counter. Another signature item, Nordstrom's cookies, are also purchased regularly as to-go items. This brand loyalty — whether to the clothing or food — can go a long way, according to Stephanie Skrbin, a principal at Lee & Associates - LA North/Ventura. "The restaurants ofer a certain cache because of the bigger name as- sociated with the concept," she says. "So a customer who is very loyal to FEEDING THE NEED Now that experiences are all the rage, many of today's luxury shopping center retailers are hoping to satiate this consumer need through restaurants of their own. By Nellie Day Derrick Moore Principal,Urban Retail Properties Avison Young The Tommy Bahama store at The Gardens on El Paseo in Palm Desert features a restaurant offering. It is part of the retailer's plan to deliver a more memorable experience.