Why Restaurants are Turning to Retail to Boost Sales
The concept of retail operations within restaurants isn’t a new idea. Think Planet Hollywood, Hard Rock Café, and Joe’s Crab Shack, where exiting through the gift shop and picking up a few trinkets for souvenirs is the norm. But newer concepts are offering thoughtfully curated retail selections with a refreshing, thoughtful feel.
Markets full of local products, shelves stocked with homey serveware, tables stacked with books, and buckets of flowers fill out each nook and cranny of these new concepts. The retail/restaurant mash-up comes along with the all-day restaurant trend—someone who comes in for lunch might come back to grab some produce or a bottle of wine for dinner. Maybe they grab a to-go coffee and pastry in the morning and return to pick up a gift for a party later.
The proliferation of this model makes sense when full-service restaurants are so often dealing with razor-thin margins that dictate decisions. A retail operation creates an additional revenue stream and more opportunities to attract repeat customers. It can create a community space or lend a neighborhood feel, and it can let a business owner explore other types of entrepreneurship, making the day-to-day less monotonous.
Sneakers and Stacks
Maketto in Washington, D.C., combines retail, restaurant, bar, and café experiences in a 6,000-square-foot space that occupies two buildings, a courtyard, a rooftop, and a catwalk. It’s a part of the group Foreign National, which owns other restaurant concepts around D.C., including two spaces in The Line Hotel, noodle bars in four Whole Foods, a boutique, and a coffee shop. Foreign National’s art director Vina Sananikone says that Maketto was designed to bring the community together, to be a shared space.
“It’s nice because you can kind of go at any time of day and there’s something to do,” Sananikone says. “We have guests who will pop in every morning on their way to work or come to Maketto to work because of the café upstairs, and then there’s a courtyard.” There’s also yoga on the weekends, local artist shows, and a collaboration beer with local brewery DC Brau available at the bar. The restaurant serves a combination of Cambodian and Taiwanese cooking from chef Erik Bruner-Yang, while the retail operation they run is a unique blend of men’s fashion and accessories, as well as home goods and periodicals. The product that sells the best for them? Shoes.
“A lot of places will have, like, a market,” Sananikone says, referencing restaurants that will sell things related to the food they serve. “It’s interesting because you walk in [to Maketto] and you’re like, ‘Oh, I can buy a watch and get a beer.’” Since the restaurant fills with dinner reservations early, walk-ins who are waiting will wander the rest of the complex. “We’ll have a waiting list and people will wander the store or go upstairs and sit down and have a drink. You don’t really have to go anywhere else.”
Similarly, at Brewery Bhavana in Raleigh, North Carolina, patrons can browse the stacks of art and design books, poetry collections, and conflict resolution and philosophy texts, before sitting down for some dim sum. There is also a small flower shop filled with local stems where they make custom floral arrangements.
Added Value and Sales
Market-driven retail still dominates in most cases. In Atlanta, Anne Quatrano, executive chef and owner Star Provisions Market + Café, takes an integrated approach with her partner to selecting products both inedible and edible for the market. In addition to the restaurant’s menu, they offer a “carefully curated selection of artisan provisions and bespoke tableware.” Many of the cheeses, as well as specialty food products like olive oils, vinegars, and honey, are also used in the restaurants.
“All the products in the store are either hand-selected and/or tasted by myself and my partner Clifford Harrison,” she says. This keeps a strong narrative and perspective running through what’s offered, even though the product line is constantly evolving and changing. Quatrano says that while the products on the shelves don’t add significantly to the restaurant’s bottom line, it’s an added value for customers.
“It does add to the guest experience, as they are able to purchase tableware and artisan products they enjoy in the restaurant to bring home,” she says of customers. Enamelware from Crow Canyon and Falcon are among their best sellers, as well as are Parmesan and prosciutto.
At London Plane in Seattle, partner and general manager Yasuaki Saito says “the shop portion of our business is definitely a good percentage of our sales,” even though “general shopping comes and goes throughout the day’s cycle.” He adds that his team switches out or introduces new products depending on what they see during travel or research, but they try to maintain ongoing support for makers they love and have worked with for some time. “For instance, we have bought ceramics from Judy Jackson out of New York since day one,” he says. Many of the products sold in the retail shop are used in service at the restaurant, from ceramics and spices to wine and flowers.
Saito notes that tourist season in Seattle adds an uptick in the sales of local products, like Ayako’s Jam or San Juan Island sea salt, candles and soaps from Marigold + Mint Botanicals, and London Plane–made goods like crackers and granola.
Incorporating Informed Inventory
Restaurants where the market concept finds a home—places like Olive & Thyme in Toluca Lake, California, and Botanica in Los Angeles—make a point to stock the shelves with products that fit the restaurant’s mission and vibe. Botanica sells local produce, natural and biodynamic wines and beer, and specialty goods they love, like La Boîte Spices and Blis Maple Syrup. And some, like nearby Lincoln in Pasadena, California, still have full-fledged retail operations attached to them, with products for sale ranging from bath products and gifts to books and grab-and-go food items.
And while some chains have expanded in rapid and unsustainable ways, others have kept their concepts tightly focused, wavering very little from what brought them success in the first place. For over 25 years, Le Pain Quotidien has grown steadily but thoughtfully, relying on its history as a bakery to inform its future. While each location is different—and there are more than 230 bakery-restaurants—there is generally a communal table and a selection of retail products available to purchase. The restaurants stock pantry items that are used in several of its recipes, like jams, spreads, olive oil, vinegars, and spices, as well as coffee and teas. Additionally, serveware and dishes like tartine boards, teapots, cups, and bowls are available for purchase.
Some restaurants have even taken the idea of incorporating retail a little further, incorporating their wares into service, both because the objects are beautiful and to show them in action. Often, this means a designer (who might even own the restaurant) is involved in choosing the dishes, glassware, or even furniture that appears at the table, like at the group of restaurants from ABC Carpet & Home, BLACKBARN Shop and Cafe, or La Mercerie, the café inside RW Guild in New York.
The combination, however, doesn’t always come easily. There are challenges that come with operating a restaurant that incorporates retail.
“It is a bit of a balancing act moving products between store and foodservice,” Quatrano of Atlanta’s Star Provisions says. Wayfinding can also greatly affect sales. “Previously, at our old location, our dinner guests walked through our market to get to our dining room. This tended to enhance evening sales. Our new location has separate entrances for the market and the restaurant, so we definitely do not enjoy as many evening purchases—although our market is open in the evening.”
For Saito and London Plane, the challenges are balanced by the benefits. While they want to offer a hospitable experience at the restaurant, they also want their customers to be able to take home some olive oil, pick up a bottle of rosé for a springtime dinner party, or grab a bouquet of flowers for a family member.
“We want each offering to be compelling in its excellence: well-made, well-served,” Saito says. “This can be challenging, to manage these different facets—flower shop, bakery, restaurant, retail shop, catering, and events and their attendant needs, from a payroll and cost-of-goods perspective. However, this wider spectrum is also what is unique and interesting about our model. We hope it is what keeps our guests engaged and returning to support our efforts.”