Sales of restaurants are positively booming, surpassing supermarket sales for the first time in almost twenty years late last year. With retail malls in decline thanks to the rise of e-commerce, landlords are hoping to tempt consumers back to the mall by appealing to their palates.
“With restaurants that are coming in with strong, high growth, they’re sort of the saving grace for landlords of these retail spaces to come in and drive traffic and sales,” Melina Cordero, CBRE’s head of retail research in the Americas, told CNBC.
According to CBRE, there are four key growth areas in the restaurant real estate sector – food trucks, food halls, “grocerants”, and celebrity chef restaurants.
Some shopping mall landlords are so desperate for new tenants that they’re even approaching food-related startups and offering to provide seed money in return for them basing themselves in their premises. Smaller sized restaurants meanwhile, are increasingly switching to larger food hall, or inside the eating areas of grocery stores. Alternatively, some have taken to offering diverse prepared food options, called grocerants. As for the celebrity chef restaurants, such as Bryan Voltaggio in Washington D.C. or Wolfgang Puck in Las Vegas, well, we can only have so many of these but the sector is still booming – with many serving as the new ‘department store’ by effectively being the biggest restaurant ‘anchor’ in many malls. Last but not least, food trucks are now a $2.7 billion a year business in the U.S. Now, shopping mall landlords are trying to persuade them to be a part of their food courts.
“Food trucks are basically the pop-ups of the restaurant business,” Cordero said. “They come in, they can set up, low cost, and they’re constantly changing,” which meets consumers’ demand for diverse food options.