Food courts are dying, but mall food is thriving

“We deliberately try to avoid the food court,” said Ken Romaniszyn, CEO of Lady M. “Of course, it’s important that the Panda Express and Subways are there, but we want to give people another [experience] of a sit-down cafe style.”

This has become an important facet of Lady M’s retail strategy. The company has 50 locations worldwide, and its $60-$100 cakes can be found on New York’s Madison Avenue and in upscale malls. like Seattle’s Bellevue Mall and Houston Galleria. One of the rare times he deviated from his no food court rule was to open a location in the (now closed) Plaza Hotel food hall.

As Romaniszyn described it, in an ideal world, Lady M would be the patisserie (or pastry boutique, as Lady M prefers) “between Louis Vuitton and Hermès”.

This is not an isolated strategy. Food complexes in newer malls are increasingly being rethought, and the days of drab food courts dotted with Auntie Anne’s and Panda Express may be disappearing.

These days, mall owners now view food as a way to attract people, rather than merely a need for sustenance. They are convinced that their new dining options are not a food court for people to kill time, but rather a trendy destination unto themselves. That means malls are furiously recruiting restaurants owned by influencers, celebrity chefs, and fancy eateries to draw in crowds. Meanwhile, mall stalwarts like Auntie Anne’s and Manchu Wok are being forced to increase their online sales channels, while the number of food court locations dwindles.

As such, the days of the mall food court may be over soon, but food still plays a big role in determining which malls survive.

A recent example gives an idea of ​​the mall’s enhanced food strategy. New Jersey-based mega mall American Dream recently teamed up with YouTube star MrBeast to host the first physical location for his burger ghost cooking company. The idea was simple: bet on a big name to attract teenagers to the mall, where they would hopefully spend more time after eating a MrBeast burger. For American Dream, the trick worked: The mall saw record foot traffic the weekend Mr. Beast came to the mall and showed off his restaurant.

Not all malls let YouTube power their restaurant strategy, but across the industry, there’s a greater emphasis on attracting celebrity chefs, influencer-run restaurants, and other trendy dining concepts. The popular Eataly food hall, which got its start in New York, opened a location in the Westfield mall in Santa Clara, California, earlier this year. In Connecticut, a mall that has seen big names like Apple, Uniqlo and Saks Off Fifth depart in recent years is betting on an 80,000-square-foot food hall from chef Todd English to fill vacancies and draw crowds again.

This is a phenomenon seen by both mall developers and food brands. According to Sam Wheeler, creative director of experience innovation at design agency Huge, the most forward-thinking retail projects are rethinking the overall spatial orientations of their spaces and tenant mixes. “She has realized the importance of physical interaction and social spaces,” he said. “There is a repositioning that needs to change in how [the food court] is presented… this is not just ‘we’re replacing the Panda Express with a Pret a Manger’, it’s ‘we’re turning it into something worth revisiting’”. In Wheeler’s estimation, the developers are rethinking their spaces to make them more of a third place.

This has meant a big change for brands that have deep mall connotations. Focus Brands, the owner of mall staples like Auntie Anne’s, Carvel, Cinnabon, Jamba and Moe’s Southwest Grill, is now doubling down on digital revenue instead of in-mall sales. The company said its digital sales, meaning orders placed online for both dine-in and delivery, account for 28% of its total restaurant sales, and it wants the online channel to account for 50% of the total by 2027. Focus has recently said that one of its main business goals is to create a better e-commerce experience, including more navigable websites for digital ordering, restaurant apps and online loyalty programs.

Beyond that, Focus has also been looking at non-mall locations and retail layouts. In 2021, it announced plans to boost its self-service offerings as a way to provide more convenient options at different retail locations. “Auntie Anne’s has become synonymous with malls and airports, but for some time we’ve been looking for opportunities to grow outside of these traditional venues,” Kristen Hartman, Focus Brands’ specialty category president, told Restaurant Business at that moment.

MTY Group, which owns brands including Manchu Wok, Baja Fresh and Pinkberry, has been trying to make a similar change as more food court outlets close. or office food courts. In 2021, locations were down to 6,719 with 14% located in shopping malls or office food courts.

“The major malls were coming back a bit early,” Chief Executive Eric Lefebvre said in his most recent earnings call. “I think the bad malls, the C malls, if you want to call them, will probably struggle longer. But malls A and B are really coming back as there is traffic.”

As such, these Class A malls are where many restaurant concepts, from food halls to smoothie stands, compete to be if they want to be in the mall at all. But the question is in the long run, how long these Class A malls can avoid the old food court trappings.

Jennifer Leavitt, vice president of marketing for the Bellevue Collection, is confident that “our restaurants have come back with a bang.” Bellevue has three mixed-use and luxury retail complexes in the Seattle area.

For decades, Bellevue has eschewed the familiar concept of mall food. “We haven’t had a food court on purpose, ever,” she said. “Our strategy has been to distribute the food.” That is, Bellevue strategically places destination restaurants throughout its complexes rather than hosting smaller versions of them in one central location. However, it does have a food hall (currently undergoing renovation) for its mixed-use building to serve office workers. Leavitt described the restaurants Bellevue tries to work with as “chef-driven.” They include steakhouses like Ascend and Fogo de Chão, a Nordstrom Café, but also include low-key options like Starbucks and Panda Express.

Leavitt says she’s noticed this trend starting to spread. “There have been some good eaters [at other malls],” she said. “There have also been some upscale food offerings where they’re a hybrid between a food court and a food hall.” That’s the key, really: “It feels more like dining in and less like fast food.” .

And of course the mix of tenants is important. Bellevue said one of its big evolutions has been to focus on local hot spots rather than larger, well-known chains. And that extends to both independent restaurants and their food hall. “We’re very intentional about what that combination is,” she said. “It’s not just about filling the space.” She continued: “For us, the food hall becomes a much more important social offering: a third place to go.”

Lady M’s Romaniszyn has noticed a similar evolution. Malls in general, he said, are looking for new ways to attract shoppers. “It’s not just about shopping anymore,” she said. Instead, the savvy developer is looking for tenants that are eye-catching and increase dwell time. “People are sociable, they don’t want to be at home anymore,” she said.

And this has led to some phenomena. On one hand, malls are looking for personalized food options that draw a crowd. And this, in turn, is reorienting the relationship that mall food had with its retail store counterparts.

“Before, retail was supporting the restaurant category,” Leavitt said. “We’ve really figured out how food is helping to bring back the retail category in our market.”

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