The Mall Makeover: How Dining is Reshaping Our Shopping Experiences
Welcome to Extreme Investor Network, where we delve into innovative trends transforming the retail landscape and enhancing consumer experiences. In this blog, we’re exploring the fascinating evolution of shopping malls, once a mecca for retail, now a culinary playground.
This article draws insights from a series of discussions on the future of malls, highlighting how developers and retailers are adapting to changing consumer preferences — turning shopping centers into bustling hubs of gastronomy.
The Shift from Retail to Culinary Destinations
Shopping malls have seen a dramatic transformation over the past few decades. Once the go-to place for shoppers seeking the latest products from flashy department stores, malls have shifted focus. The decline of traditional retailers and the overwhelming rise of e-commerce have redefined mall landscapes, pushing them to innovate or risk obsolescence.
As we’ve witnessed, the number of shopping malls in the U.S. has plummeted from a peak of 2,500 in the 1980s to around 700 today, as reported by Coresight Research. While this may sound like a sign of decline, many experts believe that the death of the mall has been greatly exaggerated.
Interestingly, Gen Z has shown a marked preference for in-person shopping, craving the mall experience that is often supplemented by vibrant dining options. According to David Henkes, a senior principal at Technomic, “Dining options drive people to the mall, and then you hope they will shop while they are there.” This statement embodies the transformation of malls into multi-functional spaces where culinary experiences are becoming a main attraction.
Culinary Expansion: A New Era for Malls
Recent changes in mall dynamics reflect a significant allocation of space towards food and beverages. According to Chris Brandon, senior vice president of leasing for Brookfield Properties, what used to comprise about 5-10% of mall space dedicated to food has notably surged to 20-30% in some centers. Brookfield’s portfolio includes over 540 full-service eateries and approximately 2,000 fast-casual options across its 129 malls.
These changes have been deliberate and strategic. By intensifying focus on dining, malls not only attract foot traffic but also boost sales from their tenants. The trend is mirrored nationwide, as Yelp’s findings reveal that a staggering 17 out of the top 25 most sought-after mall brands are restaurants.
Going Beyond Fast Food: The Rise of Contemporary Casual Dining
Gone are the days of simple food courts serving greasy meals. Today’s mall-goers can indulge in diverse culinary experiences ranging from upscale casual eateries to the artisanal offerings of local chefs. Malls now aim for a "contemporary casual" vibe, where a $30 meal doesn’t require dressing up in formal attire but still promises an elevated experience.
This evolution has been accelerated by the recent pandemic, which redirected dining traffic away from crowded city centers to suburban malls that quickly adapted to the new landscape. In fact, JLL’s head of retail research, James Cook, emphasizes that suburban malls have seen foot traffic bounce back above pre-pandemic levels.
Companies like Din Tai Fung and Sweetgreen, identifying malls as viable expansion sites, are tapping into this surge. Din Tai Fung, a Taiwanese restaurant chain, has successfully integrated its dining model into malls like Scottsdale Fashion Square and Brea Mall, enhancing its brand visibility and sales potential.
Food Halls: The Elegant Alternative to Food Courts
As the focus on dining expands, a new concept is emerging: food halls. Unlike traditional food courts, which often feature chain eateries, food halls celebrate local chefs and specialty vendors, creating a unique and premium atmosphere. Eataly, for example, is a concept that has found a welcomed place in many malls. With its vibrant markets selling fresh pasta and artisanal groceries, Eataly presents itself as an experience-driven destination rather than just a food option.
However, while food halls promise an elevated experience, traditional food courts still pull significant traffic. Popular chains like Chick-fil-A and Panda Express continue to excel, with some locations raking in millions annually.
Conclusion: The Cheesecake Factor in a Changing Landscape
Despite the influx of culinary options, one can’t overlook the commercial powerhouses that anchor many malls, with The Cheesecake Factory leading the charge. It has secured the number one spot as the most beloved mall brand according to Yelp, and its resilience in tough market conditions showcases the beneficial relationship between restaurants and mall owners.
At Extreme Investor Network, we believe that understanding these evolving dynamics not only helps investors identify opportunities but also reinforces the significance of adapting to consumer needs. As malls continue to innovate by intertwining shopping and dining experiences, they are revitalizing the traditional shopping experience and enticing a new generation of consumers.
Stay tuned for more insights and trends as we explore the ever-changing landscape of retail and investment opportunities in the future of shopping.