5Qs for Scott Benson on in-store restaurants

Retailers with in-store restaurants are hardly a new phenomenon. They’ve been a mainstay of department stores for decades. The 350,000-sq.-ft. Nordstrom flagship opening this month in New York City will feature six eateries, two run by James Beard award-winners. Category retailers like Restoration Hardware and Crate and Barrel have jumped on to the trend, and we wanted to find out how far it could go. Metro Commercial broker Scott Benson, who’s placed restaurants in Philadelphia locations, thinks pretty far.

The RH store in the Meatpacking District with a rooftop restaurant was the talk of the New York Deal Making show last year. What's that about?

Having restaurants in stores is a trend that’s going to spread. It checks the main boxes you look for in retail: best location, best offering, a strong in-place audience. When you look at Restoration’s business—luxury home goods and furniture—and match that with the decadence the New York consumer looks for, the rooftop restaurant at RH Meatpacking is true product plus experience.  

Is it practical for dry goods retail to venture into the restaurant business? Having to deal with egotistical chefs and health departments?

I think that it’s a good idea for dry goods retail to venture into restaurants.  It’s fine to deal with the chefs. Let them operate the restaurant and you operate the retail. Give them the autonomy to create a unique establishment and it will be successful for both parties.

Is it a better idea for some retail categories than others?

As long as you’re matching the restaurant offering with the retail offering, it makes sense for anybody. Restoration did a great job with RH, whereas you wouldn’t want to put a French restaurant inside of Lowe’s. All those Starbucks inside Target stores have been a huge success.

Besides the RH restaurant, which uses dinnerware and furnishings sold in the store, give me an example of an in-store restaurant that helps sell more of the core merchandise.

The best example I can think of is Lululemon. They’re selling a health brand and the Fuel restaurants they’ve put in matches up with their brand identity. It’s acai bowls, salads, healthy fare.

Will we see more fast-casual chains going in-store?

As more fast-casual chains up their digital presences and have people ordering online, they’re going to create more convenience for shoppers and being inside the store will be great for them.