UPDATE: Sept. 17, 2019: Crate & Barrel's first restaurant in Chicago did so well that the retailer plans to open up to 15 full-service restaurants inside its stores, CEO Neela Montgomery said during Fortune's MPW International Summit. She said the concept turned a profit by the second month. Montgomery didn't indicate a timeline for opening these restaurants.
- Crate & Barrel opened its first full-service restaurant, called The Table at Crate, yesterday at its Oak Brook, Illinois store, according to a company release.
- The concept is a collaboration with Cornerstone Restaurant Group. The Table is the retailer's first full-service restaurant and the restaurant group's first foray into retail. James Beard-nominated chef Bill Kim will lead the eatery.
- Restaurant guests can take signature cocktails into the adjacent Crate & Barrel retail space as they shop. The store is also looking to host chef demos, cookbook dinners and other experiential events in the restaurant. The Table's plant-forward seasonal menu is sourced by local farmers and producers.
Consumer demand for unique branded experiences is blurring the line between restaurants and retail. For home goods retailer Crate & Barrel, a restaurant offers a unique space to showcase its products. Retailers offering food and beverage options to customers in stores isn't a new strategy — department stores have included tea rooms and cafes for decades — but interest in experiential retail is fueling a wave of high-minded concepts.
Crate & Barrel is not the only retailer looking to bolster its brand with a high-end eating experience. This fall, Nordstrom is launching a flagship store in New York that will include six food and beverage concepts rather than the typical Nordstrom Cafe. The retailer is teaming with James Beard Award-winning chef Tom Douglas and Seattle-based chef Ethan Stowell to create the in-store restaurant experiences. The concept will boast the most dining options of Nordstrom's store portfolio, which currently includes 253 restaurants across 119 "full-line stores." Earlier this year, Neiman Marcus opened a flagship in New York's Hudson Yards that includes three restaurants led by a former Eataly chef.
In the past, the National Restaurant Association has named retail-host restaurants as one of the fastest growing segments for restaurants, and the concepts raked in sales of more than $42 billion in 2017, according to the U.S. Census Bureau. According to Statista, the category accounted for over $29 billion in 2009.
Retailers aren't the only beneficiaries of the pairing. By entering existing retail space, whether it be a department store or grocery outlet, restaurant companies can experiment with how they connect with customers and amplify their brand presence at little cost. It can also get restaurants in front of a new diner base, and these businesses can benefit from the brand halo of their host company, especially if their food values align, such as Whole Foods' partnership with Next Level Burger. This can also be achieved via kiosks in supermarkets rather than full-scale eateries, as Yo! Sushi is doing through a partnership with supermarket SnowFox.