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Sunday, January 12, 2025

Cheesecake Factory & Eataly: Are Mall Restaurants the New Anchor Tenants?

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The Rise of Restaurants: How Dining Is Reshaping the American Mall

For decades, the American mall was synonymous with shopping. But the rise of e-commerce and the decline of department stores have forced a dramatic shift. Today, the sounds of bustling shopping centers are increasingly punctuated by the clinking of glasses and the sizzle of kitchens, as restaurants become the **new anchor tenants**,drawing crowds and redefining the mall experience. This transformation reflects a strategic pivot by developers, who are leveraging the power of dining to attract consumers and revitalize these once-struggling retail spaces. The shift is not merely about adding a few more eateries—it’s a fundamental reimagining of the mall as a multifaceted destination focused on community, entertainment, and of course, excellent food.

Key Takeaways: The Mall’s Delicious Transformation

  • Dining is the new draw: Restaurants are no longer an afterthought but a **primary driver of mall traffic**, with some malls dedicating 20-30% of their space to food and beverage establishments.
  • Upscale dining experience: Malls are moving beyond food courts, embracing **”contemporary casual” dining** with higher-priced, trendier options, creating a more sophisticated and appealing culinary landscape.
  • Food halls rise in popularity: Food halls offer a curated selection of local and unique vendors, providing a **dynamic and experiential dining environment**, attracting diverse crowds and fostering a sense of community.
  • The Cheesecake Factory effect: The success of The Cheesecake Factory exemplifies the considerable impact a top-performing restaurant can have on a mall’s overall success, boosting its appeal and even potentially its financial health, according to **Moody’s Analytics**.
  • Strategic advantage for mall locations: Restaurants, particularly emerging chains, find malls offer **convenient access to a large customer base** and prime locations for rapid expansion.

From Food Courts to Fine Dining: A Culinary Revolution

The mall food court, once a ubiquitous feature, is evolving. While it still holds a place, it’s being complemented – and often overshadowed – by more upscale options. This shift represents a move towards a more sophisticated and curated dining experience, attracting consumers seeking something beyond the traditional burger and fries. “It used to be that the shopping occasion drove people to the mall and then maybe you grabbed a bite to eat,” says David Henkes, senior principal at Technomic. “Now, the dining options drive people there, and then you’re hoping that they’re going to do a little shopping while they’re there.

The Rise of “Contemporary Casual”

The new mall dining scene is characterized by what Henkes calls “contemporary casual” restaurants. These are establishments that offer a step up from traditional casual dining, providing a higher-quality experience without the formality or price tag of fine dining. Think upscale Korean barbecue, gourmet steakhouses, or innovative sushi restaurants. These venues often command higher price points, with meals frequently exceeding $30 per person. This caters to the evolving preferences of consumers who are seeking unique and elevated culinary experiences within the familiar and accessible environment of the mall.

The Pandemic’s Impact

The Covid-19 pandemic also played a significant role in this transformation. While many city-center restaurants struggled with reduced foot traffic due to remote work and changing commuting patterns, suburban malls saw a quicker rebound. “Even today, foot traffic to suburban malls is back above pre-pandemic levels, where in the cities and the city centers, foot traffic has not returned,” notes James Cook, head of retail research for JLL. This made malls an attractive option for both established and emerging restaurant chains seeking to capitalize on reliable customer traffic.

The Food Hall Phenomenon: A Curated Culinary Experience

Beyond individual restaurants, food halls are emerging as another significant player in the mall’s culinary landscape. While similar to food courts in their offering of multiple dining options under one roof, food halls distinguish themselves through a focus on higher-quality, often locally sourced cuisine and a more sophisticated atmosphere. “A food court is to give you a burger, fries or a slice of pizza to keep you shopping longer at the mall,” explains Cook. “A food hall is part of the experience.

Eataly: A Case Study in Mall-Based Culinary Success

Eataly, the Italian marketplace and restaurant chain, provides a compelling example of a high-end brand thriving within the mall environment. Its large-format spaces offer multiple dining options, from quick-service counters to full-service restaurants, as well as artisanal grocery sections and cooking classes. With eight of its thirteen U.S. locations residing in malls, Eataly demonstrates the potential for creating unique and immersive experiences that attract significant customer traffic. “People go to the mall for shopping, but also they go for a cultural experience,” says Tommaso Bruso, Eataly’s North American CEO. The chain’s success within the mall setting underscores the growing demand for integrated and enriching experiences beyond simple retail.

The Cheesecake Factory Effect: A Beacon of Success

The Cheesecake Factory stands out as a prime example of a restaurant chain maximizing its potential within the evolving mall landscape. Topping Yelp’s list of most popular mall brands, its consistent success demonstrates the considerable impact a strong, well-established restaurant can have.

Outperforming the Competition

While the company has faced challenges in recent quarters, including slowing same-store sales and pressure from activist investors, it has notably outperformed the broader casual-dining sector. The stock price has also shown significant growth, rising dramatically since 2023. This underscores the enduring appeal of familiar and consistently high quality, even within a changing consumer environment.

A Positive Influence on Mall Performance?

A 2023 Moody’s Analytics report indicated an interesting correlation: enclosed malls with a Cheesecake Factory are more likely to be current on loan payments. While the report attributes this more to the chain’s strategic site selection than cheesecake’s inherent allure, having such a successful tenant is undeniably seen as beneficial. Brookfield Properties’ Chris Brandon confirms this sentiment: “My god, are they productive. It’s pretty incredible what they’re able to do, and they’re a valued partner of ours.

Conclusion: A New Era for Malls

The integration of high-quality restaurants into the mall environment signifies more than just adding dining options; it’s about creating a vibrant and dynamic destination that caters to evolving consumer preferences. By prioritizing experiential retail and incorporating upscale dining establishments and food halls, mall developers are successfully reinventing these spaces as centers of community, entertainment, and of course, delicious culinary experiences. The future of the mall might just be smelled, tasted and experienced, not just seen and purchased.

Article Reference

Brian Johnson
Brian Johnson
Brian Johnson covers business news and trends, offering in-depth analysis and insights on the corporate world.

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