Retail Restaurants Expand to More Kinds of Venues

December 22, 2016

Ikea, Urban Outfitters, Bed Bath & Beyond, Barnes & Noble accelerate trend

Ikea furniture shoppers have long been able to enjoy the retailer’s signature Swedish meatballs and lingonberry jam. 

Earlier this year, the chain’s U.S. president Lars Peterson told the Washington Post, “Ikea food is becoming a core business.”

Quite a step up.  

At the time, Ikea reported sales of its U.S. food division—which includes its in-store restaurants and packaged foods in all 41 retail sites—grew eight percent annually, nearly twice the pace of the chain’s overall comp-store sales. And foot traffic to its restaurants was “trending better” than to its furniture areas. 

So 2016 saw Ikea set plans to revamp all of its U.S. eateries into “three zones for different types of diners,” the Post account said: one with high tables and barstools for a quick bite, another that is family-friendly with kids’ activities and nearby tables for parents to eat, and a third for sociable coffee breaks.

Two other updates: New graphics and menu boards tell more about foods served in the redesigned restaurants—such as the company’s switch to sustainable seafood. Its meatballs now come in veggie and chicken versions too, the Post noted.

Just after Thanksgiving weekend, Barnes & Noble unveiled a new concept store in Edina, MN, which includes a 100-seat café, restaurant and bar serving breakfast, lunch and dinner. Menu prices range up to $26, and more than 20 wines are poured and six Minnesota craft beers are on tap, reports the Minneapolis Star Tribune.   

This followed an earlier November opening in Eastchester, NY, and sets the stage for two more tests in Folsom, CA, and Loudon County, VA. David Deason, vp-development for the bookstore chain, told the Star Tribune, “It’s not grab-and-go, but sit-and-stay. It’s more conversational and more customer-focused.” 

Bed Bath & Beyond plans a restaurant serving beer and wine at its upcoming 120,000-square-foot store in Sunset Park, Brooklyn, NY. According to the New York Post, the home goods and housewares retailer will also operate a café accessible to other shopping tenants such as Amazon and Saks. BBB already has a small café and an inactive liquor license at its Chelsea, Manhattan, store.

The Urban Outfitters hipster clothier ($3.3 billion annual sales) spent a reported $19 million one year ago to buy most of the Vetri Family group of restaurants, including Pizzeria Vetri, named by Food and Wine magazine as the best pizza restaurant in America. This was one of its latest moves to bring popular chefs and appealing concepts under its retail umbrella.

For example, reports Eater, Umami Burger has been part of UO since 2008. Ilan Hall, the winner of Top Chef season two, opened its second Gorbal eatery inside a UO store in 2014. And in late-2015, UO’s Space 24 Twenty lifestyle concept shop in Austin, TX, was to include restaurants by Marc Vetri and Michael Symon Hall, and possibly others.  Vetri explained to Eater that since pizza appeals to “every age range,” Pizzeria Vetri might bring a new set of customers to Urban.

These store-based restaurants don’t typically conform to higher-end dining as in Saks and Nordstrom. Yet eateries in mid-tier apparel general merchandise retailers, as well as in supermarkets and convenience stores, share similar goals with them:

  • To lengthen store visits, enlarge transactions, and boost sales and profits.
  • Make shopping a more engaging one-stop experience.
  • To be destinations which generate their own incremental trips. 

As more kinds of retailers use food to differentiate and perform better, supermarkets and c-store grocerants that helped pioneer the movement are in a brighter spotlight. They’ll need to continue upping their in-store dining game to stay relevant and retain a competitive edge.

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