Retailer Restaurant Brands Problematic

Business Week recently reported that before we get to cheer in the new year, shoppers at the new Tommy Bahama flagship store on Manhattan’s Fifth Avenue will be able to buy one of the brand’s signature tropical-print shirts before grabbing a drink at the Marlin Bar, next to the selling floor. Later they can head upstairs to order macadamia nut-encrusted snapper at a restaurant perched above the retailing space. Its 13 combination restaurant-stores generate two and a half times the sales per square foot of the apparel chain’s 97 regular locations worldwide. And the push into restaurant style food is not going to stop there with plans to open another Island store in Tokyo next year. The company says its restaurants generate about 12 percent of its $452 million in annual revenue.

As retail sales increasingly migrate online in the US, more and more retailers are following the Tommy Bahama model of using food and drink to lure customers into stores. In Australia food and retail combinations have largely been the domain of the department stores. But most of these offerings fit more into the quick sit and re-charge model for shoppers than a highly prized gourmet experience. It is difficult to imagine that retailer restaurant combinations can evolve into an attractive and compelling proposition within the Australian retail scene.

For such a concept to have real appeal, it would require some defining element, other than convenience, to position it as an attractive alternative to the amazing array of specialist restaurant offerings we have available. It would need a unique setting that had an attraction factor in its own right, or a celebrity chef dimension with a twist, or an amazingly high-end exclusivity that afforded it bragging rights. All in all, given the small size of the Australian market and the staggering array of great restaurant offerings available, a retailer operated restaurant proposition seems highly problematic. If I happen to be proven wrong on that front in a meaningful way, I will happily buy you lunch. That is so long as it is not a Harvey Norman inspired concept that gets up….as I am not sure it will be of a cuisine style that appeals to me, or you!

Peter Singline
Brand Scientist

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