JLL Real Views – America’s Malls Court Customers Through Food

A shopping mall - Photo by Dieter de Vroomen on Unsplash
America’s Malls Court Customers Through Food

A bite of locally sourced salmon carpaccio at a cozy bistro, after snowboarding on the world’s largest indoor ski slope. A craft cocktail reservation booked by a concierge, before browsing the racks at Gucci. A sip of wine at an open-air Italian market tied to a celebrity chef, during special hours set aside for VIP guests.

These are not snippets from a movie star’s travel log. They are new food offerings at American malls in New Jersey, Philadelphia and California, respectively. They represent the wave of the future, as owners seek to completely redesign the experience of eating at a mall­, re-imagining the notion of what a “mall” means.

Landlords across the country are doing away with the plastic chairs and grimy tabletops. Rather than offering a slate of predictable national chains in one crowded court, owners are looking to draw in customers with one-of-a-kind foodie experiences.

More than 40 percent of malls that have undergone renovations since 2014 gave their food offerings a facelift, according to JLL’s A New Mall Rises report. At the 90 malls studied, food and beverage upgrades were by far the most popular makeover category.

“Food has to carry more weight than it used to,” says James Cook, Director of Retail Research at JLL. “It used to be that you would come to shop, and then you would have something to eat so you could go back to shopping. Now, as midline department stores struggle, food has to pick up that slack and become a new anchor.”

Thinking outside the food court

Revamping food and beverage goes beyond redecorating a food court.

“The overarching theme of all food renovations is to make it feel less like a cattle call,” says Lew Kornberg, Executive Vice President at JLL. “Rather than one enormous area, it’s more integrated.”

To achieve this, owners are creating smaller, fine-dining clusters around luxury retail. At Simon Property Group’s King of Prussia Mall in Philadelphia, restaurants like Mistral—a farm-to-table food and craft cocktail concept from chef Scott Anderson—are designed to blend in with the aesthetic of surrounding stores. Mistral’s space is softly lit, spare and accented in blue, with high ceilings and bar shelves that float from suspended wood. The airy vibe drifts into nearby retailers, like the even-more-spare Apple Store around the corner, Salvatore Ferragamo and Coach.

Customers at King of Prussia’s luxury wing can book their dinner reservations at a concierge desk reminiscent of a hotel lobby, where there is complimentary sparkling water and cookies.

Landlords are also leasing portions of shuttered department stores, which have their own entrances, to restaurants. This makes dining more accessible since customers don’t have to descend a mall’s depths to grab a bite, Kornberg notes.

At King of Prussia, Outback Steakhouse and Yard House leased part of a former Sears. In the Galleria in Houston, Nobu and Fig & Olive moved into what was once Saks Fifth Avenue.

As landlords looked beyond the food court, the overall space dedicated to eating and drinking increased by five percent over the past decade, according to JLL. Food and beverage offerings now take up between eight and nine percent of the total space within malls and could grow to represent 20 percent by 2025, according to a 2017 study by ICSC and JLL.

“If you look at Westfield’s Century City mall, Eataly has significant square footage,” says Taylor Coyne, Senior Research Analyst at JLL. “People are going to go there for Eataly. It may have the halo effect that they end up buying a few things at retail stores.”

Getting the ‘90s out

Landlords tend to update their food courts every 20 to 25 years, Cook says: “They might have had renovations done in the ’90s, so now they are making changes to get the ’90s out.”

Two decades ago, the vogue was low ceilings, florescent lighting and boxy vendor spaces with primary-colored signage. Modern design now calls for open, bright spaces with softer colors.

One way to achieve this is to literally knock down walls and roofs. In Downtown Los Angeles, the Bloc, formerly Macy’s Plaza, is going through a $250 million transformation. In the first phase, the roof of the mall was removed, exposing the previously dark and uninviting space to the sun. Since then, the farm-to-table restaurant District has opened alongside a courtyard with outdoor seating. Austin-based chain Alamo Draft house is scheduled to open in 2018.

Seating styles have changed, too. King of Prussia, for example, has opted for an airport feel: high-top barstools with plugs at every seat to recharge iPhones and soft seating in clusters where customers can gather.

Many food courts are being redesigned to look more like urban food halls, with local wine and artisanal food vendors in large, artfully decorated spaces. When a national tenant leases a space, they do so with a kiosk style that’s unique to the location—and may even be worthy of a photograph.

“It’s not all about Instagramming things,” Coyne says. “But that Instagram-ability does help you market your brand and location.”

Local beer meets Shake Shack

Design can only go so far without a good tenant mix. Rather than leasing to old standbys, landlords are looking for food offerings with a strong enough appeal to draw in customers on their own.

Take Westfield’s Century City mall, which unveiled its $1 billion makeover in November 2017, complete with private lounges, secret elevators and special hours for celebrities to shop in privacy. Its centerpiece is Eataly, an Italian food emporium where shoppers can buy groceries, sip wine and eat meals cooked by an elite roster of restaurateurs. “That’s the Disneyland of Italian food right there,” Cook says.

To keep the tenant mix relevant to the Instagram crowd, some landlords are seizing short-term leases. Others rent courtyard space to a rotating cast of popular food trucks and surround them with communal seating.

“In the past, a lot of old line retailers got stuck in the mud because their spaces could not be redone without spending a lot of money,” he said. “The smarter retailers and mall owners are thinking of the evolving needs of the customer.”

The biggest change to the overall tenant mix over the past decade may be the focus on alcohol. Westfield’s Century City has an outpost of the craft beer and burger joint Tipsy Cow and a Bar Verde within its Nordstrom’s store.

“In the ’80s and ’90s, you didn’t really expect to be able to get beer and wine in a food court,” Cook says. “That’s totally changing now.”

What’s becoming overwhelmingly clear is that one size no longer fits all—every location, every mall has different tenant needs.

“Every food court should be different, and the investment is going into making these spaces unique,” Coyne concludes. “The more you don’t follow the recipe, the better.”

 

This story originally appeared in JLL’s Ambitions magazine. Download the full issue now.

Jll Real Views