Do food courts need an overhaul?
The recent bankruptcy filings of Sbarro, Quiznos and Hot Dog on a Stick had some observers lamenting on the sorry state of food courts and regional malls.
The Sbarro bankruptcy was largely blamed on the chain having most of its locations in mall food courts as mall traffic continued to erode. Some believe customers are looking for a higher-quality menu and atmosphere than the chains provide, more like that represented by the fast-casual trend led by Chipotle and Panera Bread.
Still, a revamp could make food courts a surefire differentiator for malls against online shopping, some say. As part of a $325 million expansion, the food hall at Mall of America is being upgraded with a vision of merging the typical food court experience with that of sit-down restaurants.
"You’ll still be able to go to the different offerings and venues, but the seating areas will be broken up. It won’t just be this open sea of seating like you have at a traditional food court," Kurt Hagen, SVP of development for Triple Five, the mall owner, told the Minneapolis/St. Paul Business Journal. "And the quality and offerings, I think we’re going to take it up a notch on that end as well."
The space will feature eight to nine grab-and-go restaurants with "more unique and higher quality offerings" than typical food court fare, three or four fast-casual restaurants with their own interior seating, and two or three sit-down spots. A dish washing area will enable restaurants to use reusable plates, bowls and utensils instead of disposable plastic.
Another reinvention with a local focus is occurring with Food Network’s Food Court Wars, now in its second year. Each episode visits a new city with the mall looking to "open a brand-new ‘local’ eatery in the food court that offers a fresh region-specific menu." Entrepreneurs vie for a chance to open their own food court restaurant, rent-free for a year, plus $10,000 in investment capital.
"In posher cities, you’re gonna get a little better experience because people are willing to pay more," Tyler Florence, the host of the show, told the Miami Herald last year. "But it’s pretty consistent from coast to coast. Right now, there’s kind of these homogenous, bland offerings. I want to make the food court sexy!"
- Mall of America rethinks food court with new ‘food hall’ – Minneapolis/St. Paul Business Journal
- Food Court Wars – Food Network
- Retailers See Fourth Consecutive Annual Sales Increase During 2013 Holiday Season, According to ShopperTrak – ShopperTrak
- Sbarro, a Food-Court Staple, May File for Bankruptcy as Early as Next Week – Entrepreneur
- Is This the Year Fast-Food Pizza Disappears? – Entrepreneur
- Quiznos joins fast-food chain Sbarro in filing for bankruptcy – The Guardian
- Quiznos Follows Sbarro Into Bankruptcy Court – Bloomberg News
Discussion Questions
How would you revamp food courts at the regional malls? Are food courts potentially a material differentiator for malls to online shopping?
It is tough to differentiate when there is a central place to eat. Many malls put the food courts at the top level to encourage shoppers to visit. Reality in 2014 is I’d rather grab a power bar than be forced IKEA-like to go somewhere I don’t want to go. Also, seeing several franchise offerings come out of the same kitchen does not speak to any shopper as a good thing.
Start with the customer – just as in all retail. Revamping the offerings is a good idea but also location and quality of the restaurants is just as important.
I’m not convinced that food courts are any kind of useful differentiator between physical/digital commerce. The only way that would be so is if malls created true culinary destinations, something food courts certainly are not.
From my observation, people will go to chain restaurants at malls like The Cheescake Factory, as a dining destination and possibly as the capper to a planned day of shopping, but they are a branded restaurant with a certain ambiance. Food courts are largely a take-out pizza, Chinese, sub, hot dog, or whatever storefront, w/no significant brand ID and no ambiance. Aside from common seating, they often share the same trays and baskets.
So without a $325M or more investment and “kill the court” mentality or a switch to stand alone restaurants with both a mall and exterior entrance, I would suggest mall owners look at other tactics to revitalize traffic.
This all depends on the area the malls are located. If it is a money town, than a revamp will draw more business providing the mall puts in healthier options, with higher quality selections.
Sushi bars, Panera Bread, premium burgers with brioche buns, and amazing toppings, Asian fusion style foods – those will all do well.
In the low income areas, all I can say is good luck, because the mall traffic is less than 50% of what it was 10 years ago. My mall in Ashtabula lost every business in its food court except pretzel time.
Pretty sad, but that is how it is today.
Well, most of the food courts I’ve seen could begin by offering … well … edible food.
Next, almost all of them could benefit from improved sanitation, general cleanliness (with an eye to specific attention to tables and chairs), etc. In other words — getting the basics straight.
Now, if a food court was offering food that was tasty, unique, competitively priced, etc. in even a basic, no frills, clean, environment, then it might be a differentiator. Add a little ambiance and who knows what might happen?
As to whether that’s enough to head off Amazon et. al. forever, the answer is “No.” But that said, it could slow the bleeding significantly.
It’s about time! Food courts have always represented the low-common-denominator concept of retailing. What was once a valid concept is now a dinosaur.
The direction the Mall of America is taking sounds appealing.
For malls (and brick and mortar retailers) to continue to flourish they need to recognize that humans are social beings that would rather be “out and about” (that’s my Canadian coming through!) … but only if the experience is great. Retailers and malls that make shopping fun, interactive, creative, and worthy of exploring will do great. The food court is an obvious target for improvement.
Without painting every regional mall with a broad brush, it’s clear that many food courts have not evolved nearly as fast as customers’ tastes. You can picture the “typical” food court group of tenants with your eyes closed: The steam-table Chinese food, the tenants selling “teriyaki” or “bourbon” chicken that are indistinguishable from each other, perhaps a pizza place, a Cinnabon and somebody selling cheese steak subs. Occasionally you might find a national fast-food franchise, such as McDonald’s, Taco Bell or Arbys. (Does it sound like I have spent too much time in food courts?)
Meanwhile, many of the trends driving the restaurant or fast-casual business are being ignored. Where is the “locavore” offering? What about a healthier sandwich and salad outlet? Isn’t there a growing market for Thai or Indian food?
Most mall operators have broadened their food offerings outside of the food court, from Five Guys to Panera to Starbucks and so forth. Why leave the food court as a culinary and nutritional dead zone?
For food courts to succeed, they must match the current trends in eating behavior by consumers. The movement is toward freshly prepared products, sourced locally if possible and no antibiotic or hormones in the meat. This is not easy to achieve but if you have questions, see Chipotle.
The revamped food court here at Perimeter Mall in Atlanta is very impressive and effective. The seating is now bar stands with phone chargers, bar tables with bar seats and semi-private lounge seats for a small group to enjoy. The food selection is now better with an Indian restaurant and Chipotle.
Mall managers should understand Sbarro, Hot Dog on a Stick and Quizno are not impressive to the 21st century foodie willing to spend $20 at a food truck festival. In fact, mall managers should have realized why there are food trucks with 50 people in line during lunch hours willing to eat Korean tacos.
I would recommend bringing the “pop-up” concept into the food court with celebrity and unique chefs during certain times of the year.
Are food courts potentially a material differentiator for malls to online shopping? You are kidding, right? The food at home, where I shop online, is considerably better than anything at a food court.
Don’t lose focus here. The mall is the dog. The food court is only the tail. Fix the mall, if it is fixable, first. If the mall doesn’t generate traffic, the food court is irrelevant.
And, be careful about changing the offerings. They aren’t a whole lot different than one finds driving down any highway in America.
To truly upgrade the customer experience, food courts have to do several things:
You go to the food court because you are at the mall, not because you want to go to the food court.
Nationally, as we all know, consumers are moving towards “healthier” food. This is apparent in the decline of carbonated beverage sales, McDonald’s comps, etc., as well as the success of perceived healthier brands like Panera and authentic ones as well, like North Star Cafe here in Columbus (fabulous, but you can’t get in one!).
So, clearly, the malls need to upgrade the offerings by bending to better food. Those brands mentioned are the remnants of a different time and consumer mentality. That’s a start. With the better-for-you brands will come a better atmosphere in terms of design — they go hand in hand. Then the rest will fall in the hands of marketing spend, announcing the changes. Lots to do.
Environment sets the expectation (and the price). Malls have a lot to gain by making aesthetic improvements and little things (purse hooks, charging stations) mean a lot. Food courts can absolutely be a differentiator for malls, and airports too, for that matter.
Having recently visited the food court at the Mall of America, it is, like many other food courts, in serious need of an overhaul. The days of the wide open cheap seating with barely edible foods is over. Upgrading environment and food quality is a must. I don’ t think, however, that this will reinvigorate dying malls or be a competitive advantage against online shopping. But it will be a plus for malls in vibrant areas that still have strong traffic.
With the exception of the Mall of America, there are a majority of regions in the country where mall traffic is down overall. Revamping only the food courts will not in itself spark new profitable growth. There have got to be compelling reasons to visit a mall. Millennials and younger kids are no longer going to the malls like older generations did. That’s the biggest problem I see. Spending millions on a new food court won’t fix that. I think you need newer attractions that cater to newer interests… a “Social Media Hub,” etc.
The “Instant Poll” is of little value. The problem is not food courts alone. The whole mall concept has to change if they are going to continue to be a retail focus. Between newly open air shopping centers and the Internet, we all know shopping is no longer what is used to be. So unless the owners of the major malls, working with their tenants, come up with some new ideas, it won’t matter what the food courts do. You have to have a strong mall shopping community to accomplish success in the food court, regardless with what they offer.
I’m pleased with the scope of renovation that Triple Five is planning for Mall of America and believe the market style food area for grab-and-go, along with a variety of casual and sit down dining options, is a much needed mix to support shoppers who view the mall as a destination experience.
However, I do not believe any food court would cause a consumer to alter their online shopping habits. The ease, convenience and immediacy of online shopping is much too alluring when contrasted with driving, parking, walking, potential wait lines and crowds the mall offers. Possibly the sexy food court would add a little spice, zest, pizzazz…but as a destination experience, not to complete a specific act of shopping that can be handled easily online.
It’s about time – food courts have been the slow followers in the revamp of America’s malls – at least those malls that have any hope for existence, let alone success. Malls need to address their food experience, adjusting to the customer’s needs and desires. They should start by retiring the “food court” label and signage. If done effectively, a food experience can provide a differentiator to compete against online shopping, particularly for shoppers who can combine immediate gratification of retail products and food and beverages.