Food halls drive mall traffic, not clothing sales


Food courts and halls are attracting traffic to malls around the country, according to a new survey by UBS. They are not, however, proving successful in helping retail stores in those same shopping centers sell more clothing.
UBS’s research, CNBC reports, finds that consumers are increasingly going online to buy clothing rather than visiting malls. Today, 25 percent of all apparel is bought online, according to the investment bank, which forecasts that 31 percent of clothing sales will be purchased through digital channels by 2023.
Mall operators have increasingly relied on food halls, entertainment providers and other non-traditional tenants (gyms, co-working spaces, etc.) to get more people to visit their facilities. A report released last year by the real estate developer, Cushman & Wakefield, forecast that the number of malls with food halls would grow from 70 at the time to around 300 by 2020.
The survey of more than 2,500 consumers by UBS found that food concepts are drawing traffic to malls, but not enough at present to offset the loss of sales by clothing retailers, particularly department stores. The percentage of respondents who said they visited a mall to eat rose from four percent last year to seven percent at present. Those who go to the mall to shop at department stores fell from 25 percent to 20 percent.
UBS’s findings are somewhat out of synch with previous research that showed food offerings support traditional retail stores in malls. A report from Jones Lang LaSalle found that shoppers who eat at the mall spend an average of 35 extra minutes browsing stores compared to those who do not eat on their trips.
Research by WD Partners found that a number of food concepts including farmers markets, food halls and grocery stores are likely to influence the frequency of consumer visits to malls.
Seventy-seven percent of digital natives (age 18 to 29) said a farmers market would influence their decision to visit a mall compared to 75 percent for digital immigrants (age 46 and older). Food halls scored 78 percent for digital natives and 61 percent for digital immigrants. Grocery stores were seen as a draw by 61 percent of younger consumers versus 55 percent of older ones.
- More people are going to the mall to eat at the food court, not shop, UBS says – CNBC
- Can food halls become retail’s new anchors? – RetailWire
- Will foodie culture save the mall? – RetailWire
- Have U.S. malls lost their sense of community? – RetailWire
DISCUSSION QUESTIONS: How can landlords and retailers deal with the exodus of apparel shopping to online stores from mall-based stores? Do you see food concepts as an important response to this challenge?
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27 Comments on "Food halls drive mall traffic, not clothing sales"
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Founder, CEO & Author, HeadCount Corporation
There’s not much landlords can do to stop the trend of shoppers going online. Mall operators are traffic aggregators and they will continue to look for ways to drive traffic into their malls. The new American Dream Meadowlands is a good example. Instead of being a shopping mall that also includes entertainment features, it’s an entertainment park that also includes shopping. Traffic for the sake of traffic does retailers no good. Food courts, waterparks and skating rinks are all well and good, but retailers need to provide shoppers with reasons to visit their stores, and not just rely on mall walkers to stumble upon their stores.
Managing Partner, RSR Research
Personally, I think it’s too soon to tell. There are a lot of forces at play here. The goal is for the retailers to do their part and make their stores more shoppable, and the mall operators to do their part and make the mall a place shoppers would like to go to.
I just think a year or so into this new era is early to declare victory or defeat. There are a LOT of extraneous forces at play.
Principal, Retail Technology Group
Yes. What you said! We like to get ahead of ourselves sometimes so we can have something about which to talk, or even deal a premature death knell. It is too soon. In the meantime, if malls can increase (or recover some of the lost) traffic, some of those foodies will become shoppers. Another “wait and see.”
Vice President, Strategic RelationsHamacher Resource Group
Great discussion topic, George! My concern with any of the infotainment or other traffic-drawing efforts by retailers or malls is that they are pigeonholed as a separate entity. Integration here is key.
What might it look like if the food hall staff were given the hottest, trendiest clothing by the surrounding apparel retailers to wear during their shift? Or the gifts or gadgets were on display on the tables of the hall for guests to touch and interact with? Doing something together is always better than going it alone.
President, founder and CEO Interactive Edge
It was the point I wanted to make before being called into a meeting this morning. What if malls were designed to be more open – meaning you walk through the store to get to the food court? It has to be open and free flowing in order to be more engaging. Think outside the box, or should I say outside the four walls.
CEO and Disruptive Retail Specialist, Gustie Creative LLC
Agree with your comments here, Dave. Integration of efforts between retailers and/or with mall management is key and can drive more sales and help generate a positive experience for shoppers.
Chief Executive Officer, Progress Retail
This is where retail theory has gone wrong. In theory, enabling opportunities in shopping centers for human beings to congregate (food halls and co-working) is a no-brainer, until we profile the young freelance graphic designer who is utilizing the co-working space, and not purchasing new clothing. If not for sustainability reasons alone, landlords have to attract (fashion) e-commerce marketplaces to open up shop, get closer to customers, reduce waste, and be a return/exchange fulfillment point.
Managing Partner Cambridge Retail Advisors
I believe that malls need to entertain their guests and food is a big draw. Food court fare is not going to draw people with significant disposable income so it’s important to offer a range of entertainment options such as fast casual and fine dining.
Another idea is to look for non-traditional anchor concepts like the Wegmans in the Natick, Massachusetts mall. A multi-story gem that replaced a Sears location.
Shopping is theater and even the best estimate has 70 percent of shopping still happening in a store so retailers need to be more creative with their entertainment approach.
Channel Development Manager
“Shopping is theater” is smack on the point, where the customer is the star and the merchandise and staff are the supporting actors. When I see the same three colors in dress shirts, and over half the inventory is “athletic/slim fit,” the floor is messy, and no sales clerks working the floor, that’s a show that I get bored with really quickly.
Chief Executive Officer, The TSi Company
Founding Partner, Merchandising Metrics
Are there any malls that track food hall comp sales relative to apparel retailer comp sales? If the food business is shrinking less than the apparel business, that means people eat and then walk by the apparel stores to go home and shop from their couch. That’s a pretty severe indictment on the kind of storytelling that the mall apparel retailers are executing. Surely there are aspects of “discovery” and “treasure hunt” shopping where the store beats the internet. How about store-only product? How about frequency of fresh deliveries that might incentivize the shopper to visit more frequently out of a little curiosity? How about ANYTHING other than making the % savings a bigger and bigger number?
Global Retail & CPG Sales Strategist, IBM
Malls have typically been the least agile format of retailing. That has to change for them to thrive long term. Be aware of retailing evolution as it happens, or even before it happens, and capture that wave while it is growing.
EVP Thought Leadership, Marketing, WD Partners
Content Marketing Strategist
To stop the exodus, landlords and retailers can emphasize what e-commerce lacks: immediacy, sensory and social benefits.
Consumers can immediately walk away with the merchandise, certain that a product fits. By engaging all the senses, physical stores offer a richer customer experience. Shopping with friends or asking associates questions in the moment can make the in-store experience more social and pleasant than shopping online.
Landlords and retailers also need relevant strategies. Younger consumers in particular avoid department stores, as they prefer retailers with a modern approach that adapts to serve consumers’ evolving needs.
A simpler, short-term solution is partnerships. Apparel retailers can collaborate with food chains to capitalize on mall traffic, such as offering food hall shoppers a discount on apparel purchases.
President, The Ian Percy Corporation
Your last paragraph reflects my thinking exactly, Lisa – or maybe I’m reflecting yours in my contribution today! I differ only in that I think it’s a long-term solution.
President, The Ian Percy Corporation
CEO and Disruptive Retail Specialist, Gustie Creative LLC
Recently I met with the General Manager of a newly renovated Simon Mall and we discussed what’s ahead. The renovation itself is telling. It includes gathering spaces throughout the mall that encourage relaxation and conversation, while offering discreet charging for devices. VR dining experiences are coming and will appeal to digital natives and entertain digital immigrants, too. With Disruptive Retail, I’m working to bring in pop-ups, certainly at in-line spaces but also in the cart and kiosk areas. This is where retailers can create interactive and engaging online-to-offline retailing that captures shoppers who are in the mall for entertainment or dining. People are looking for connection and the mall offers a community. Integrating online-to-offline retailing is key.
Retail Thought Leader
CEO and President, Cogent Creative Consulting
The key point in this article is that, according to Jones Lang LaSalle, shoppers who eat at the mall spend an average of 35 extra minutes browsing stores compared to those who do not eat on their trips. This is an important fact. While extra shopping time may not directly result in increased clothing sales in the mall, what the facts don’t explain is how much that extra shopping time resulted in online sales. Showrooming is very common practice among consumers, especially for apparel. According to research from BRP Consulting, 56 percent of consumers participate in showrooming.
I think food concepts are good for malls, as anything that increases foot traffic is a good thing.
sales management consultant
CFO, Weisner Steel
I’m confused by the terminology here: (to me at least) a food HALL is one of those things in European department stores, or here in the States something like Reading Terminal Market, where one buys prepared food. A food COURT is where one actually eats. My suspicion is George is referring to the latter, actual use of the term notwithstanding.
But whatever the specifics, it’s clear what these creations aren’t: they aren’t the traditional consumer goods stores that malls counted on for traffic; and their development will bring a host of new issues ranging from vagrancy and peak period load issues to how to promote businesses that aren’t tied to the traditional shopping cycles. Strong malls will do this well and further differentiate themselves from their lower-tiered brethren, while the latter may end up with something like what is shown in the photo … a depressing experience.
Founder & CEO, New Retail Ethos & New Retail Ethos Publications
I think it might be a bit premature to tally the results, just yet. Mall operators are experiencing a dearth of viable retail tenants with the massive disruption happening throughout the retail sector. They are scrambling to attract experiential players to offset the mass exodus of anchor tenants. Additional mall footfall does not automatically indicate a direct correlation to increased apparel revenue. Many apparel retailers are operating from the same playbook and are not innovating or evolving to cater to their guests. However, I admire and commend the mall operators for the creative and innovative endeavors they are attempting to offset the influx of available openings.
CEO, President- American Retail Consultants
Yes, food will continue to drive traffic at malls. However, retailers have to do their part to embrace omnichannel marketing and enhance their appeal to their target market.
President, Protonik
Fully agree with Paula Rosenblum that it’s too early to tell.
That said, those enthusiasts for mixing entertainment and shopping should take caution from what’s being found here. There’s no magic way to add entertainment to your store — especially because it’s impossible for a retailer to create entertainment which isn’t lower grade then pure entertainment.
Truth is, food courts make tremendous sense — and that department stores still struggle. Their issues are outside of what a food court can do and reflect increasing trends hurting the boring middle.
COO
Someone touched on “There is no creativity, or any desire to be different for fear,” which I feel is the macro issue within this topic, as well, you could extend it to specialty ecommerce stores forgetting to be “special” and often, just mimicking old big-box merchandising.
Co-Founder and Executive Partner, VectorScient
I think it’s too early to tell. Getting traffic in is a big deal. If not, retailers would surely be in worse position. The question probably can be framed better. Is the premium to be in a mall as opposed to outside the mall, is paying off.
I have not seen a well executed coordinated promotions along with mall operator. You can buy a coupon booklet at some malls. Calvin Klein gives some coupons to shop at other brands in the family. But overall pretty lame in terms of making it attractive and Mall-Exclusive promotions. If the mall operator has done enough to attract people to come in, surely the retailers can do their part in convert them.
They have several advantages compared to online. Being able to try, having it in stock, immediate gratification and most importantly, it is not easy to do price comparison on same product, unlike commodity products like electronics. So in that sense, the “Showrooming” effect is less prevalent. On balance, I think retailers can do better at their end.
COO, Retail for the People