IRVINE, CA—It may sound cliché, but it's nonetheless true: the new collection of small restaurant concepts generates remarkable sales per square foot, attracting routine customer traffic to projects, CBRE EVP Philip Voorhees tells GlobeSt.com. In this retail roundup, we spoke with Voorhees and other retail experts about the prospects they see for the future of this sector, and several mentioned food concepts and restaurants as gaining strength. (For a more in-depth view of the retail sector, see the Annual Retail Review in the May issue of Real Estate Forum.)

According to Howard Wong, managing director of retail for Passco Cos., we will continue to see an increase in the rise of unique concepts and independent retailers, among these are the food retailers. “The rise in food retail will continue to grow over the next several years. In fact, we've already seen this trend start to take form in centers throughout the country,” he tells GlobeSt.com. Previously, restaurants would typically account for approximately 10% to 20% of a retail center. Today, they make up approximately 30% to 40%. “Consumers today are demanding experience-driven environments and unique centers that emulate the latest in exciting new restaurants and fast-casual food options.”

Wong adds that this shift has proven successful in centers across the country, and in many cases, dining and restaurant sales are rapidly outpacing traditional retail sales including department stores. In fact, we may start to see restaurants and foodie concepts act as the anchor for retail centers. One of the reasons for this is that restaurants bring consumers to a center at a much higher frequency than traditional retail. “Many consumers will go back to the same center to visit its restaurants weekly and even daily versus traditionally, where traffic has been driven seasonally by items such as back-to-school and holiday sales. This has resulted in higher traffic and more sales for a center.”

Voorhees says for the first time ever in 2016, Americans spent more money dining out than on food purchases from grocery stores. Feature restaurants from North Italia and the Hillstone concepts to collections of small concepts like Blaze Pizza, the Habit Burger and Panda Express all generate remarkable sales per square foot, attracting routine customer traffic to projects.

Larger shopping centers are also seeing the value in a variety of food retailers in attracting and keeping customers around longer. Lifescapes International recently designed the landscaping at the Point in El Segundo, CA, a 115,000-square-foot lifestyle shopping center featuring more than 30 shops and restaurants, Julie Brinkerhoff-Jacobs, the firm's president, tells GlobeSt.com.

Along with food concepts, coffee shops continue to be popular retail attractions. Bill Asher, EVP of Hanley Investment Group, tells GlobeSt.com that developers will continue to repurpose outdated sites previously occupied by independent gas stations or auto-related businesses with, for example, a new Starbucks with a drive-thru. “Approximately 60% to 70% of all business for quick-serve restaurants (like Starbucks) comes through the drive-thru. Starbucks is definitely capitalizing on that success announcing in December 2016 its plans to add 12,000 stores by 2021.” Asher says watch for new “drive-thru-only” Starbucks formats that are typically less than 1,000 square feet with no interior café to increase in years to come and take the place of smaller corner lots in high-traffic locations.

Instant Insights /

Restaurants are Still a Strong Retail Anchor

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