Department store restaurants on the rise

From cafes to high-priced dining, it’s all the about the full shopping experience. Department store restaurants are back in fashion.

Kai Ryssdal: This week the National Retail Federation did what you'd expect the lobbying group for 3.5 million American retailers to do. It said, 'Oh yeah, we think holiday sales this year are going to be great.' We're going to get some ground truth on that tomorrow with a special live retail show. We'll be on the road to a mall out in Commerce, Calif., askin' around about how things are going.

But cynicism about statistics aside, there is a certain something about holiday shopping. The nostalgic among you will fondly remember big department stores with magical window displays, pictures with Santa and little sandwiches -- no crust, of course -- and tea at the department store's restaurant. You just can't get those things online. So as those stores fight for customers, they're putting a lot more money on the table -- as it were.

Marketplace's Stacey Vanek Smith reports.


Stacey Vanek Smith: Bloomingdales is bustling from the army of perfume sprayers stationed near the entrance. To Santaland, where antsy kids are waiting in line for their turn.

To Forty Carrots, the health food restaurant known for its big salads and frozen yogurt. Heather Saxon is waiting for a table with her mom and sister.

Heather Saxon: It is a family trip -- we're showing my mom the city. Every time we're in New York, we come to Bloomingdales for the frozen yogurt.

Department store restaurants are back -- in a big way. Macy's in Midtown is undergoing a $400 million renovation. It's getting a wine and chocolate bar, a pub and a white tablecloth restaurant with views of the Empire State Building. Nordstrom is opening a string of old fashioned grills. And Lord and Taylor has brought back the ladies' lunch in New York with the upscale Sarabeths.

Jack Hruska: We know the value of the excitement of food. It brings a lot of energy, it brings a lot of theater back into the store.

Jack Hruska is executive vice president of creative services for Bloomingdales; it has six restaurants at its flagship 59th Street store, including a Magnolia Bakery that opened this year.

Hruska: You can get anything you want on the Internet. When I actually leave my house and I want to go to a store, I want a bigger experience.

Jen Drexler: I love department store restaurants. I mean, it reminds me of when you used to get dressed up to fly. Like it was a big deal to eat a meal inside the department store.

Jen Drexler is a retail analyst with Insight Strategy Group. She's standing outside Macy's Cellar restaurant, where she used to come with her mom and now brings her daughter. She says department store restaurants can tap into powerful memories.

Drexler: Before Macy's was Macy's, it was Bamburgers, and on your birthday you got to come and open a treasure chest with a key and pull out a present. And I remember those days really well, which just makes me happy to be here.

That nostalgia is what department store restaurants are banking on now. They've never been huge moneymakers; instead, they pay for their valuable floor space in other ways says Jan Whitaker, author of "The World of Department Stores." She says in addition to making kids and women feel welcome when other restaurants didn't, department stores have used tea rooms and cafes to promote products and host special events.

Jan Whitaker: When they saw the potential of the restaurant, they realized that it was a marketing opportunity. They really started to get a lot of mileage out of the restaurants.

And that's still the plan. Bloomingdales will start tying restaurants into storewide promotions. Like say, for Diane Von Furstenburg's home line -- the store might debut her tablecloth designs in one of its restaurants. Macy's new pub will be open after hours to lure male crowd into the store.

But the real value of department store restaurants is simple, says Suzanne Johnson, general manager of Saks 5th Avenue. It's popular cafe, home of the Saks salad, overlooks Rockefeller Plaza.

Suzanne Johnson: It keeps customers inside the store longer. They can shop, and they can have a meal or a cocktail and then they can continue shopping.

Nothing like a cocktail to help take the edge off those credit card charges.

Susan Zott is holiday shopping with her friend.

Susan Zott: We came here to shop, but it came to be around lunch time and we heard that they have good soup here. You know, your legs get tired from walking around.

Department store restaurant mission accomplished -- not that convenience doesn't have its drawbacks. Again, Bloomingdales' Jack Hruska:

Hruska: Do I eat in our restaurants all the time.

Vanek Smith: Do you have a favorite?

Hruska: I do, unfortunately, because it's why I need to go on a diet. I like Flip, which is our gourmet hamburgers and French fries and chocolate milk shakes, and I just can't go there very often.

In New York, I'm Stacey Vanek Smith for Marketplace.

About the author

Stacey Vanek Smith is a senior reporter for Marketplace, where she covers banking, consumer finance, housing and advertising.

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