US malls are undergoing a transformation as they race to reinvent themselves to attract customers back in the era of the pandemic and changing consumer habits. With anchor department stores closing and name-brand chains leaving, malls are turning to smaller and regional restaurant chains with a local following and a wider menu of global cuisines. Emerging restaurant brands like Lazy Dog, Gen Korean BBQ, and Postino Wine Café, as well as “eatertainment” concepts like Puttshack and Topgolf, are being brought in to draw customers back to malls. Drive-thru locations are becoming prioritized by national chains over sit-down restaurants in malls, as they prove to be more profitable and efficient.
Food has become a significant focus in malls, with the amount of space dedicated to food growing from 5% in the 1990s to 15-20% today. Food and beverage options in malls are now considered anchors, replacing some of the department stores that have closed. Landlords and other mall tenants are recognizing the value of strong restaurants and entertainment options in drawing in steady foot traffic and increasing the amount of time consumers spend in malls. The shift in focus towards food and entertainment is seen as a way to revitalize malls and keep them relevant in a changing retail landscape.
Quick-service restaurants like McDonald’s and Chick-fil-A have been closing mall locations, with many chains opting for drive-thru models instead due to their profitability and efficiency. Drive-thru sales reached $133 billion in 2022, a 30% increase from pre-pandemic levels. Chains such as TGI Fridays are closing lower-performing mall locations, while others, like Chick-fil-A, are focusing on drive-thru formats. This shift in strategy reflects the changing preferences of consumers and the need for quick and convenient dining experiences.
New restaurant concepts like Gen Korean BBQ are emerging in malls, offering customers unique and diverse dining experiences. With around 40 restaurants and plans for significant growth, Gen Korean BBQ is attracting customers looking for something different from the typical burgers, chicken, and pizza places found in malls. The company is expanding at both larger regional malls and smaller strip malls as malls rebrand their spaces to attract restaurants. While it remains to be seen if this shift in tenants will be successful in the long term, mall landlords and analysts acknowledge the importance of having anchor eateries to help draw in customers.
Overall, malls are evolving to meet the changing needs and preferences of consumers by focusing on food and entertainment offerings. The rise of smaller and regional restaurant chains, as well as unique dining concepts like Gen Korean BBQ, is transforming the mall landscape. With a greater emphasis on food and beverage options, malls are seeking to create a more vibrant and engaging experience for consumers. While challenges remain, such as the loss of anchor eateries, the shift towards innovative dining options signals a new era for malls as they adapt to the shifting retail environment.
