Malls’ appetite for fine-dining restaurants is growing
The Fig & Olive restaurant chain drips with foodie cred.
The eateries, which started in Manhattan, feature fancy olive oils and celebrity sightings. An average diner’s check easily breaches $50. The Mediterranean-inspired cuisine is the antithesis of quick-stop mall chow.
But come November, a Fig & Olive will open in a 12,000-square-foot space at Fashion Island in Newport Beach, beating out 50 others for the prime spot away from the main shopping plaza.
There will be ocean views, a garden with a fireplace, wine shelves and a white room inspired by the Cote d’Azur. Each of the 60 olive trees ringing the site costs $15,000, only a small part of the multimillion-dollar investment by the restaurant chain and the Irvine Co., which owns the property.
“The stigma of opening in a mall is going away,” Fig & Olive founder Laurent Halasz said of his first foray into a shopping center. “There’s been a huge change.”
U.S. shopping centers are moving from fast food to fancy food.
It started a few years ago as tired food courts began transforming into slick dining terraces. Now, upscale restaurants are making an appearance, even replacing department stores as mall anchors.
At Irvine Co. Retail Properties, which owns Fashion Island and Crystal Cove Shopping Center, also in Newport Beach, an increasing portion of mall revenue is coming from food. Two staffers are dedicated to finding dining tenants; two years ago, no one was.
“We view these restaurants as being traffic draws,” said Dan Sheridan, the company’s president.
Drawing visitors has become a big concern for mall operators, who figure they need more than apparel and shoe stores and the occasional movie theater.
They’re battling growing online shopping options and free shipping offers. Plus, the busier schedules wrought by the recovering job market have more consumers making purchases from the convenience of their phones and computers.
At the same time, shopping center owners are losing interest in multi-unit budget eateries and are courting elite foodie favorites with the lure of prominent plots of land and consultations with top-level mall executives. They’re targeting the growing ranks of diners who shun cookie-cutter chain menus for meals they can brag about on blogs and social media.
Industry statistics show that restaurants at malls are outperforming those centers’ fast-food outlets. Sales at mall restaurants grew 4.3% in the year that ended in May, while mall fast food purveyors posted a 0.3% decline, according to data from the International Council of Shopping Centers.
“The presence of food and beverage as a fresher, more upscale experience is only going to get bigger,” said architect Tim Magill, a partner at 5+ Design in Hollywood. “The ratio is tilting more in that direction than retail, especially as shopping centers have to offer something more that people can’t get online.”
The Irvine Spectrum closed its food court late last year and will add an Umami Burger inside an expanded Irvine Improv next year and sprinkling new culinary options such as Cucina Enoteca, Wood Ranch and Tender Greens to pull foot traffic throughout the center.
Medical transcriptionist Kelley Uyeda, 45, has managed to munch at every Irvine Spectrum restaurant, including organic eatery Paul Martin’s American Grill and vegan stop Veggie Grill. Compared with five years ago, she has more than doubled the amount of time she spends at the mall.
“I don’t go there for the shopping — it’s because they have some really great restaurants,” the Foothill Ranch resident said. “I’m more inclined to meet up with people there now.”
At Fashion Island, Fig & Olive won’t be the only upscale dining option.
Mexican concept Red O from celebrity chef Rick Bayless will open this winter. The first Lark Creek and Blue C locations in Southern California are also arriving on the property this summer, along with the first Lemonade stop in Orange County.
A Cucina Enoteca with shoppable décor is coming as well, taking the place of an El Torito Grill. The center’s McDonald’s and Red Robin are no more.
Tamarind of London, the first Michelin-starred restaurant to enter Orange County, appeared in 2011 at the Crystal Cove center. Five of the 11 eateries there are considered fine dining, while only one is a fast-food outlet.
Hip dining establishments ring the lawn at the Americana at Brand in Glendale, where culinary darlings Din Tai Fung and Michael Mina’s Bourbon Steak will land by the end of the year.
Din Tai Fung is also heading to South Coast Plaza in Costa Mesa next year along with the Capital Grille, while McDonald’s and Rainforest Cafe are closing.
But malls should be careful about investing heavily in a food-centric floor plan, said Rachel Rosenberg, executive vice president of real estate broker RKF.
“It’s imperative that not only the tenant but the landlord consider the regionality — both the market and the consumer base — when putting together package deals,” she said. “For example, Darden [Restaurants Inc.'s] concept, Seasons 52, may be well suited for a cosmopolitan, upscale market, but may not translate to the consumer in less sophisticated locales.”
Restaurants also have notoriously tight margins. Eateries, especially fast-casual outposts that rely on lunch, will be successful in a retail center only if they have a stream of nearby patrons — such as office workers hungry for lunch — available at all hours, she said.
And teenagers who congregate at the centers and families with antsy young children may not be as inclined to spend the money or time required for an upscale sit-down meal, other analysts said.
The advent of glitzy mall food has existing restaurants looking to spruce up as their leases expire.
California Pizza Kitchen, a perennial shopping center tenant, has opened a sleek prototype establishment in the Westfield Topanga mall in Canoga Park. The experiment is next to luxury retailers such as Henri Bendel, features reclaimed wood detailing and an herb display and serves of-the-moment salted caramel desserts and truffle oil.
Hot Dog on a Stick, which has operated in malls for four decades, is increasingly moving out of food courts and into free-standing kiosks and other spaces. Newer locations feature metal instead of dated tile and televisions with moving displays instead of plastic menu boards.
“It’s a case-by-case situation as they redevelop these centers,” Chief Executive Dan Smith said. “You have to adapt to the changing face of malls, but we don’t plan on leaving.”
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