Say goodbye to Ruby Tuesday and Chili’s. This is the hot new restaurant in the mall

Say goodbye to Ruby Tuesday and Chili’s. This is the hot new restaurant in the mall

Looking for food at your local mall? As US malls race to reinvent themselves, they’re turning to sushi conveyor belts, craft beer membership clubs and Korean barbecue to replace burgers and fries.

Over the past few decades, shopping malls have become the urban centers of many American communities. But the pandemic, overbuilding and consumers’ move toward discounting and online shopping changed all that. As major department stores leave the mall, so do some name brand chains such as Ruby Tuesday, Chili’s, Applebee’s and others.

What’s taking their place reflects a big shift in US tastes: There’s a boom in smaller, regional restaurant chains with a local following. Plus a wider global cuisine menu.

Landlords are counting on emerging restaurant brands such as Lazy Dog, Gen Korean BBQ and Postino Wine Café to draw customers back to the mall. So-called “eatertainment” concepts like Puttshack and Topgolf, which can extend the amount of time people spend at the mall, are growing. One fast-growing chain aimed at families, Kura Revolving Sushi Bar, delivers plates to diners on a conveyor belt while rolling robots serve drinks. Tableside monitors offer games, cartoons and toy gifts for big eaters.

At the same time, many national chains are favoring drive-thru locations over their sit-down restaurants in shopping centers.

“There’s definitely a newer layer of concepts. There’s a new guard in the mall,” said Chris Simms, CEO and founder of Lazy Dog, which has about 50 ski lodge-themed restaurants around the country. a big stick and a bar with craft beer in the middle.

Simms said he was drawn to opening a Lazy Dog restaurant in the mall to invite customers who might stop nearby to catch a movie or run errands. “There’s something about having that synergy around you. I’m looking for traffic drivers,” he said. “Malls create a great opportunity for that.”

Encourage longer visits
Food has long been an afterthought in malls, and department stores are the main reason shoppers visit.

But Macy’s, JCPenney, Nordstrom and others are closing hundreds of their stores in malls as online shopping has grown to about 16% of US retail sales. Real estate research firm Green Street estimates that about 150 indoor malls have closed since 2008, leaving about 900 today.

Strong restaurant and entertainment options attract steady food traffic and can increase the amount of time consumers spend in a mall, making them valuable to landlords and other mall tenants.

The amount of space dedicated to food in shopping centers has grown from 5% in the 1990s to 15 to 20% today, according to Deloitte.

“Food and beverage is the anchor today,” said Mark Hunter, managing director at commercial real estate investment firm CBRE specializing in shopping centers. “It has replaced some convenience stores that were abandoned. More and more landlords want to invest in it.”

Drive-thru steals traffic Many quick-service restaurants such as McDonald’s and Chick-fil-A have closed mall locations.

TGI Fridays announced earlier this year it would close 36 underperforming locations in 12 states, some of them in shopping centers. (It still has about 230 branches in the United States.)

Chick-fil-A closed its original location at Greenbriar Mall in Atlanta last year after 56 years. Chick-fil-A restaurants were only located in mall food courts for the company’s first 20 years.

Some chains are focusing on the drive-thru model in part because it’s more profitable: smaller than sit-down restaurants, requiring less staff and maintenance, said RJ Hottovy, head of analytics research at data analytics company Placer.ai.

Drive-thru sales will reach $133 billion in 2022, up 30% from pre-pandemic 2019 levels, according to Technomic, a restaurant industry consulting firm.

“Traditional mall restaurants are casual dining chains such as Chili’s, TGI Fridays and quick service restaurants in food courts. They want a drive-thru location now,” Hottovy said.

Enough pizza places?
Gen Korean BBQ is an example of one of the new types of restaurants that are growing in shopping centers.

The company has approxa 40 restaurants and has plans to grow to at least 250. Customers order meat to their table and cook it themselves.

“There are so many burger, chicken and pizza places,” said co-CEO David Kim. “People want to experience something different.”

Gene thrives in both larger regional malls and smaller strip malls.

“Many of these regional malls are rebranding their spaces to attract restaurants,” Kim said.

It’s too early to see if this tenant shift will work long-term. Landlords and mall analysts consider that the loss of any flagship eatery is notable. But the Cheesecake Factory has no robots.