From Cucumbers to Caviar - Department store eateries have gone trendy to attract busy shoppers.

When caterer David Zafferelli joined the throngs at Nordstrom’s new downtown San Francisco store in October, he dropped $150 on two flannel shirts and another $150 for bubbly and Beluga caviar at the store’s Champagne Exchange bar.

“We just thought that was as much fun as shopping,” he said. “I’ll always go for any excuse to drink champagne and eat caviar.”

Increasingly, shoppers who stop to nosh at department stores are finding chic, newfangled eateries in place of the proper tearooms and restaurants of their childhoods. Whereas patrons in the early part of the century sipped tea and nibbled cucumber sandwiches, customers of upscale department stores today are more likely to have espresso and cookies or Cornish game hen and Chardonnay or mesquite-grilled chicken and pasta salad.

The shifts in department store food service reflect a fundamental change in the philosophy of shoppers, observers say. In the old days, people would make shopping an all-day event, with a leisurely lunch or tea break built in. Today, with time-starved but hard-working baby boomers hankering for service and quality, the right restaurant can serve not only as a lure but also as an incentive to linger in the store. And shoppers such as Zafferelli have proved willing to spend liberally for the ambiance.

Of course, old-fashioned tearooms still exist, and some, such as those at Bullocks Wilshire and Bullock’s Pasadena, are thriving, particularly at holiday time. But many stores in recent years have turned these genteel anachronisms into stylish cafes or bistros where customers come year-round just to dine, never mind the shopping.

“The ‘80s has brought us into a whole different era,” said Robert J. Nyman, president of George Lang Corp., a New York firm that develops restaurant concepts. “Most stores today are using food service as an amenity that has to do with the total marketing of the store.”

With department stores undergoing sweeping changes of late, many retailers, particularly downtown merchants that must compete with ubiquitous suburban malls, have strived to hold onto or devise unique operations that make them a destination. Restaurants often fill the bill, even if they don’t contribute heartily to the bottom line.

At the new Nordstrom in San Francisco, for example, the marble-topped champagne bar has become a draw for upscale customers, as has an authentic English pub modeled on one at Harrods in London. At the flagship Bloomingdale’s in Manhattan, the premier dining spot among half a dozen eateries is Le Train Bleu, a re-creation of a luxury Orient Express-type dining car. The Dayton Hudson department stores in the Midwest are expanding a Marketplace Foods concept that offers carry-out pasta, stir-fried dishes, freshly baked breads and frozen yogurt to busy downtown workers.

Unlike their tearoom predecessors, which usually were situated in a store’s highest reaches, these food outlets are often stashed next to fashion departments. And they are a far cry from the Formica-topped counters prevalent at five-and-dime and discount stores.

“The opportunities for food in department stores are the best they’ve been in over 20 years,” said John D. Lovelace, central director of food services for Dayton Hudson in Minneapolis. “People eat every day, but they don’t shop every day.”

Food service has gone in and out of favor with retailers over the last few decades, and even today retailers’ philosophies differ widely.

“It is a very mixed bag,” said Charles J. Leven, senior vice president, director of operations at Saks Fifth Avenue in New York. “Some companies are cutting back, a few are expanding.” Saks intends to open its first restaurant at the flagship Manhattan store next year, Leven said, after customers clamored for food service.

‘Quick Food’ Concepts

Until about 1950, large department stores catering to the carriage trade typically used a chunk of their space for tearooms. In the 1960s, the popularity of such rooms declined, and many started losing money. As real estate became more valuable in the 1970s, merchants began devoting the space to clothing and other items that were more profitable. At the same time, many stores were going into suburban malls that had abundant sit-down restaurants or fast-food outlets in so-called food courts.

Then women went to work in record numbers and the population became more health and diet conscious. Fewer people had the time or inclination to spend a leisurely afternoon at their favorite tearoom. That gave rise to a variety of “quick food” concepts in stores catering to customers for whom money was less of an object than convenience and quality.

Nordstrom plunged into the food business 10 years ago after having leased space for years to a small chain of restaurants. It now has 70 food outlets in 58 stores, most under the names Espresso Bar and Cafe Express, featuring fresh soups and salads.

Faced with having to attract shoppers to a seedy location three blocks from Union Square in San Francisco, Nordstrom decided to go in for some culinary theatrics in its newest store.

“We wanted to create little pockets of fun,” said Jim Dickinson, general manager of the Seattle-based chain’s restaurant division. “We also wanted to create a reason for people to stay in our stores rather than get out to our competitors.”

The Pub, strategically placed next to the men’s department, is modeled on the Green Man at Harrods in London, an innovative retailer that houses about 20 food outlets and a massive food hall where Londoners and tourists alike buy pricey groceries. The Nordstrom room features stools covered with forest green leather, a plank floor made of Kentucky barn wood, a healthy selection of imported and domestic beers and television monitors.

If the Pub idea proves successful, Dickinson said, Nordstrom plans to expand it into other new stores nationwide. The chain also is considering a “bread basket concept” that would sell freshly baked goods and small open-face sandwiches, already dubbed Nordwiches.

The store’s Champagne Exchange was designed to offer a high return. It takes up less space by far than would a traditional tearoom yet affords a high markup on its caviar and 103 champagne varieties. The concept “enables the customer to spend a lot of money,” Dickinson said. “We do find, particularly in San Francisco, it doesn’t bother people to be drinking a $9 glass of champagne.”

Lots of Flash

The chain also this holiday rolled out its Nordstrom Select Pantry, a selection of gift food items developed in its restaurants.

Overall, Dickinson said, Nordstrom’s restaurant operations account for 1.5% of the chain’s annual sales (which last year totaled nearly $2 billion) yet 22% of its transactions, indicating that food tabs are generally far lower than those for other purchases.

Bloomingdale’s flagship store in New York also goes in for selling sizzle along with its steaks. “The restaurants at Bloomingdale’s have evolved into unique concepts in tune with the eating public,” said Will Hellemeyer, director of food service. “We are what people expect of restaurants in the ‘80s . . . and not what they expect to find in a department store restaurant.”

After renovating the housewares department several years ago, the store was left with a long, narrow space on an intermediate level between two floors. A store designer came up with the idea of copying a luxury dining car, complete with green velvet chairs, white linen tablecloths and brass chandeliers.

Le Train Bleu (named for a midnight blue engine), which opened in 1978, is “a Continental restaurant that competes with restaurants on the East Side of Manhattan and is rated in dining guides,” Hellemeyer said. With seating for 64, the restaurant features such specialties as calf’s liver with cassis and shallots, grilled Cornish game hen stuffed with foie gras and wild rice and grilled swordfish with sun-dried tomato butter. Average tab: $20.

Among other Bloomie’s food service operations, Hellemeyer said, are Forty Carrots, a “healthy food” restaurant in which the store years ago introduced frozen yogurt to the New York market; Showtime Cafe, an upscale cafeteria similar to Cafe Casino, and Espresso Bar, “a Euro-chic Italian cafe” offering desserts, fresh pastas, salads and wines.

The decision whether to offer food service is usually based on a store’s location and bottom line. Store officials would not talk about their restaurants’ financial results, but they acknowledged that food service is an expensive proposition.

The food business “in general has lower margins than most other merchandise in a department store,” said Ken Stevens, a consultant with the Los Angeles office of McKinsey & Co. It comes down to a trade-off, with the retailer determining whether the intangible benefits of offering the service outweigh the reduced profitability.

At Marshall Field’s in Chicago, for instance, the legendary Walnut Room--a restaurant in the old tradition--is not considered a big profit maker “other than that it’s a big draw,” said Homer G. Sharp, head of central display. “Obviously, people go shopping while they’re here.”

Some End Food Service

With a typical sit-down eatery costing between $500,000 and $1 million to install, many retailers, May Co. California among them, are inclined to put restaurants into free-standing stores but not into those mall locations served by a food court. Another consideration is space: New department stores tend to be far smaller than the huge stores of years past and have less space to spare for low-return businesses.

Bonwit Teller, a fashion specialty store, has phased out its food business. Until its purchase by May Department Stores two years ago, Robinson’s was making a big push into food service. Now, it has only three food outlets chain-wide, all of them leased.

In designing its newest stores, including those in Los Angeles and Palm Desert, Bullock’s left out restaurants. And when the chain remodeled its Santa Ana location, the restaurant was removed.

The tearoom in Bullock’s Pasadena, according to James B. Brooks, the store’s general manager, is the chain’s most profitable food service operation and lately has been expanding its successful banquet business. Even so, the tearoom recently eliminated its evening food service, primarily because of increased restaurant competition in Pasadena.

One of the biggest proponents of food is Dayton Hudson Department Store Co., which claims to have the largest upscale food service among U.S. department stores, serving 12 million patrons a year.

When Lovelace, the food service director, joined the company in 1982, he immediately set about developing new “upscale fast-food” concepts and transforming the company’s traditional sit-down restaurants “to meet the needs of the customer of the ‘80s.”

Among other operations, the company came up with Yogurt Express, which generates a hefty $1,000 in sales per square foot (compared to about $200 for non-food merchandise) and is being rolled out to several of the company’s 37 stores; 700 Express, designed to serve customers quality fast food within 10 minutes, and a combination of five quick food concepts that replaced the flagship Minneapolis store’s traditional Sky Room and quickly tripled sales. The company is also expanding its 4-year-old Marketplace Foods, similar to Macy’s Cellar in New York, with a substantial carry-out area.

Reflecting customers’ rapidly changing palates, ethnic foods are playing a bigger role in Dayton Hudson’s offerings. Forget the cling peach halves, cottage cheese and iceberg lettuce leaves of yore. New menus offer Morocco salad, made with boneless chicken breast and couscous ($6), and smoked salmon with radicchio, bibb lettuce, avocado, grapefruit, chopped egg and caviar, Dayton Hudson’s most expensive salad at $7.

The Broadway, too, has found that its customers’ changing tastes have forced it to adapt quickly to new trends. It recently closed a traditional sit-down restaurant at its Brea Mall store in favor of a deli service with lighter fare. “We . . . have seen a really remarkable response,” said Richard F. Clayton, president.

‘Food Is Fashion’

Unlike Bullock’s, the Broadway has put food service operations into its newest stores, but it also recently closed restaurants in Beverly Center and Baldwin Hills where it “couldn’t come up with a formula that worked,” Clayton said. The 43-store chain now operates 24 food facilities, serving more than 2 million diners a year.

“That’s a lot of transactions,” Clayton said. “It’s important because we touch a lot of customers.”

Meanwhile, food service, once the province of large department stores, has also spread to smaller specialty apparel boutiques such as Koala Blue, with its Australian-style milk bars; Fred Segal, which has restaurants at stores in Santa Monica and on Melrose Avenue; Merry Go Round, a chain selling young men’s and women’s apparel that is testing a ‘50s-style diner and soda fountain in a store in Denver, and Barneys, an exclusive women’s clothier in Manhattan that has Le Cafe, a buffet and bistro bar with about 90 seats.

To Dickinson of Nordstrom, the merging of menus and merchandise makes sense. “We consider ourselves a fashion retail store, and we believe food is fashion,” he said. “There is tremendous opportunity for good dining.”