Mixing restaurants with retailing is an old concept that's being reenergized as brick-and-mortar stores vie for attention from increasingly harried and time-challenged consumers.
“The concept behind offering food within the retail space is a sense of dwell space where experience is integral to shopping. A place to relax, savor the moment, and linger in the retail environment,” said Roseanne Morrison, fashion director at Doneger Group, a New York-based consulting firm for the retail and fashion industries.
The latest retailers to venture into the food arena for the first time are Crate & Barrel, opening The Table at Crate, a full-service restaurant, at Oakbrook Shopping Center, and Lululemon, debuting Fuel Space, a self-service café located on the second floor of its 20,000-square-foot experiential store, in Chicago’s Lincoln Park neighborhood. And when Nordstrom opens its first flagship store in New York City on Oct. 24 at Columbus Circle, the retailer will launch six different food and beverage concepts, ranging between restaurants and bars.
These retailers join a list of stores offering well-established dining components—Freds at Barneys New York, L’Avenue at the Saks Fifth Avenue flagship, The Rotunda at Neiman Marcus in San Francisco, and BG, the restaurant at Bergdorf Goodman.
At another end of the food-with-shopping spectrum, is Ikea's well-known, no-frills Bistro cafeteria, serving free coffee, along with specialties like Swedish meatballs.
Dining adds customers and ambiance
The renewed attraction to store dining seems straightforward—as retail struggles, restaurants are doing well.
“People have been spending a lot more on eating out over the last 20 years than they have been on clothing or any other physical item,” said Sucharita Kodali, a retail analyst with Forrester Research.
Plus, adding food service could have a positive impact on sales.
“They can serve different purposes—additional SKUs for more takeout sales that are about convenience, sit down and unique menu items for more of a restaurant experience, etcetera,” Kodali said.
Neela Montgomery, chief executive officer at Crate & Barrel, said incorporating food and beverage was a natural extension for the home furnishings brand.
“We view this project as an exciting experimental moment and we truly believe in the combination of retail and dining,” Montgomery said. “Depending on how the space performs, we do see an opportunity to bring similar concepts to other stores. Though we don’t have concrete plans at this time, we’re always exploring new ways to offer meaningful moments to our customers beyond the traditional shopping experience.”
The Table at Crate is a partnership with Chicago chef Bill Kim, of Urban Belly fame, and Cornerstone Restaurant Group. The restaurant offers lunch, afternoon tea, and dinner. Menu items include a Citrus Cured Cold Smoked Salmon, $15, Watermelon Salad, $15, Skirt Steak, $29, and C&B Burger, $15.
Montgomery said offering food and beverage within stores is a strategy to engage retail customers in a fun, leisurely way beyond the store setting.
“The Table at Crate is a way for us to not only drive traffic to our Oakbrook store, but also increase the frequency of customers visiting us, while showcasing our expertise in the dining and entertaining space in a way that’s truly authentic to the brand,” Montgomery said.
Lululemon's Fuel Space
At Lululemon’s first experiential store, on North Avenue in Chicago, shoppers will find plenty to do beyond shopping for the brand’s famous yoga pants. In addition to grabbing coffee, a kombucha on tap, lunch or dinner at Fuel Space, the store offers two workout, or “sweat,” studios, with daily yoga, strength training and HIIT classes, and a meditation room.
“Lincoln Park embodies Lululemon’s purpose, vision, and culture,” said Celeste Burgoyne, executive vice president, Americas and Global Guest Innovation. “The location was designed for our guests to experience connection, community, and sweat all under one roof. The Fuel Space is a first for us, and in addition to fostering connection, it offers locally-sourced, seasonal food and drinks so that our guests can connect with their bodies while living into their full potential.”
It’s too early to say whether the brand will open more stores with cafés.
“We’re really excited to learn more about how the Fuel Space, sweat studios, and meditation space resonate with our guests,” Burgoyne said. “Right now, we’re focused on testing and learning, but we’re excited to consider other experiential stores in the near future.”
The food industry, however, is not without its challenges.
“Department stores like Saks and Nordstrom have some restaurants and they have been promising in the past, but there is so much competition in food that it may be harder now,” Kodali said. “A better approach is to license an existing concept or have a store-in-store with an established chef. Urban Outfitters acquired Vetri outright so that’s another approach. Not sure it’s transformed the brand but it’s a fascinating idea.”
Creating a dwell space can be simple and Morrison points to the coffee bar at the Hermes store in the Meatpacking District in New York as a good example. “It provides a quiet calm and an opportunity for enjoying the store experience, while immersing the shopper in the totality of the brand,” she said.
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