Americans love for eating out is shaping the retail real estate market across the country. The average American now spends more money on eating out at restaurants than they do at the grocery store according to the report “Rise of the Foodie Nation,” by JLL. In 1992, Americans spent $163 at grocery stores for every $100 spent at a restaurant. In 2015, spending on eating out just surpassed grocery store expenditures.
This new trend has not gone unnoticed by food-related retailers, who now represent 4 out of the 5 top expanding retail categories. The success of food related stores and restaurants have been a significant factor for real estate for years. JLL reports that aggregate store opening plans yields a potential retail real estate impact of 55.4 million square feet.
Dining while you shop
Department stores, apparel retailers and grocery stores are capitalizing on this trend. Macys, Nordstrom, Saks and Tommy Bahama have realized a big draw for consumers includes the offer of an epicurean escape. Tommy Bahama restaurant-retail stores earn twice the revenue per square foot as those without restaurants. Groceries stores, such as Whole foods are expanding their retail space to team up with the restaurant Raw Foods to include raw and vegan foods, a full service bar and expanded coffee stand. Mariano’s Fresh Market, and Wegmans have full service bars, in store restaurants, and breweries in its grocery stores.
Consumers are voting with their dollars for more upscale food choices. Fast food stands are expanding at a slower pace (1.5 percent in 2014) than the fast-casual restaurants like Chipotle and Panera Bread, which are projected to grow by 7.2 percent. The full service restaurants are projected to grow by 3.2 percent according to the JLL report.
Food trucks are growing in popularity and are expected to increase revenue by 76 percent in the next five years. Their small size and mobility appeal to consumers sense of novelty, particularly among the Millennials.
Dinner and a movie
The movie theater industry is jumping onto this trend by developing more luxury theaters that include a dining option. Movies theaters like iPic, Cinepolis and Silverspot have expanded their menus beyond the standard popcorn to include chef-inspired fare that foodies crave along with luxurious reclining leather chairs, and alcohol. AMC is also beginning to convert some of its theaters to provide this more upscale experience.
Source: “Rise of the Foodie Nation,” JLL Retail Research Report 2015
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