Eataly, the global Italian gourmet market and restaurant chain, is venturing outside cities such as New York and Chicago into the suburbs to rapidly expand in North America. In so doing, it's showing how suburban malls are attracting traditionally urban tenants.
The company opened its first location in New Jersey at the upscale Mall at Short Hills in the past week, bringing its tally in North America to 13 sites and 50 stores worldwide. Eataly Short Hills, spanning just over 17,000 square feet on the mall's first floor next to Bloomingdale's, features a 230-seat restaurant, several quick-service counters and a retail section with premium, imported Italian and regional foods.
Eataly's arrival in Short Hills reflects the evolution of malls, analysts say, with original food courts so iconic and embedded in popular culture that they've been featured in Stephen King novels and movies like "Fast Times at Ridgemont High" and "Paul Blart: Mall Cop." Those first food courts featured quick-service options such as national burger chains. Today, retail landlords are looking for and inking leases with higher-end restaurants — and food purveyors known for high quality like Eataly — to elevate their malls.
If they don't, they run the risk of not keeping up with changing consumer preferences for dining and losing foot traffic, according to retail analysts. Suburban malls are now positioned to be good locations for upscale dining and are attracting them as tenants, said Darren Tristano, CEO of consulting firm FoodserviceResults, in an email to CoStar News.
"The shift for higher-quality restaurants has been supported by growth in retail development in more affluent areas and lifestyle centers requiring better-quality restaurants," Tristano said. "Landlords have to bring in high-traffic operators to fuel sales for their retail tenants. The mall food courts we have seen in the past were quick and cheap. Even these food court operators have shifted to healthier and higher quality juice bars, coffee shops and fast casual operations. Younger consumers have pushed the trend as they expect better quality and are willing to pay for it."
The Short Hills mall, owned by Taubman, is located in a section of Millburn, an affluent bedroom community of New York City. Eataly already has a big presence in Manhattan — with locations downtown, in the Flatiron area and SoHo. The chain's sites combine a market, a food hall and a full-service restaurant to create what Tommaso Brusò, CEO of Eataly's North America branch, described as "the experience" of being in Italy — beyond being a grocery store.
While some upscale restaurants have been in malls for decades, the move shows an acceleration of that shift in the years after the pandemic hit this property type hard. The chain already has three locations in not only New York City but Toronto, as well as outlets in other North American cities.
New areas
It is part of an expansion designed to include the debuts of five new North American locations next year.
"Eataly's expansion into suburban markets reflects a strategic pivot as its urban store footprint matures," Amanda Lai, a director at consulting firm McMillanDoolittle, said in an email to CoStar News. "With existing locations in major cities like New York, Los Angeles and Chicago, there are now fewer urban markets available to support new stores. Eataly has broadened its focus by opening in additional markets like Dallas and Boston, as well as suburban areas that present new growth opportunities."
Investindustrial, an independent European investment firm, has held a majority ownership stake of 52% in Eataly since last year, and it is looking for growth, according to Brusò. A veteran of the fashion industry, Brusò was named CEO of Eataly's North American operations, a newly created position, in September 2023.
"We are truly an entertainment company," he told CoStar News at the Short Hills grand opening. "People come to us to enjoy the Italian lifestyle. Now we say we champion the art of living, Italian living, so we really pretend in a humble, humble way to be an alternative to going physically to Italy."
In addition to Eataly, the Short Hill mall's tenant roster includes Ruth's Chris Steak House and Legal Sea Foods as well as retailers like Neiman Marcus, Bloomingdale's, Gucci and Louis Vuitton.
Simon Property Group brought famed Nobu, the eatery led by chef Nobu Matsuhisa and co-owned by actor Robert De Niro, to the Phipps Plaza mall in Atlanta as part of its redevelopment. The restaurant opened in 2022.
The five Eataly locations slated to open next year include some sites in high-end malls in new markets:
- Aventura Mall, 19501 Biscayne Blvd., Aventura, Florida;
- King of Prussia Mall, 160 N. Gulph Road, King of Prussia, Pennsylvania;
- Hudson Yards, 20 Hudson Yards, New York;
- CF Toronto Eaton Centre, 220 Yonge St., Toronto; and
- CityPlace, 700 S. Rosemary Ave., West Palm Beach, Florida.
Brusò said the company isn't specifically seeking out "urban" or "suburban" sites, but rather "the right community."
"Everything comes from the right community, where people appreciate it and that are looking for this experience," said Brusò, whose wife is from New Jersey. "Coming to Short Hills, it came natural. A lot of people work in New York, they know us in New York, and they ask us: 'We want to have the same experience in Jersey.' So for us it can match up to be in the mall."
Eataly's locations average in size from New Jersey's 17,000 square feet to 30,000 square feet, to some as large as 50,000 square feet, according to Brusò.
Pasta and wine
All Eataly's locations have a full-service restaurant, he said. In Short Hills, it is called Eataly Ristorante, with a menu that include dishes such as Tagliatelle alla Bolognese with pork and beef ragu, a variety of pizzas and 100 kinds of Italian wine spanning all 20 regions of Italy.
The market area offers hundreds of products made in Italy, including artisanal imports such a extra virgin olive oil and balsamic vinegar. Along with a selection of dry goods, the retail space has a wine shop, fresh products from regional producers and counters dedicated to salumi and formaggi and fresh pasta, with an area for live pasta-making demos.
"Their model incorporates both restaurant and retail so their goal is to get retail consumers to dine in and vice versa," Tristano said.
Eataly in Short Hills also features quick-service counters: Caffè Lavazza, an all-day cafe featuring Lavazza coffee drinks; La Pasticceria, a pastry counter with cakes, croissants and other baked goods; Il Gelato, with gelato and sorbetto; Pizza alla Pala, offering a variety of Roman-style pizza; and Panini, a counter dedicated to focaccia and panini.
"It’s the food hall concept on steroids," Chuck Lanyard, president of the retail brokerage The Goldstein Group, said in an email to CoStar News.
He's been to several Eataly locations in the United States as well as Europe.
"I love it: great food, great concept, always packed," Lanyard said. "Excellent quality food and not inexpensive, either. It definitely caters to higher-end customers. ... Short Hills makes sense."
Upscale shift
Tristano said he's been to Eataly locations in Chicago, New York and Los Angeles, and that the company "has been strategically opening in major cities in the U.S and at a conservative pace given the size and overhead involved in their footprint."
In those types of urban environments, "foot traffic, tourism and affluent consumer proximity can support the volume of sales necessary to cover overhead," according to Tristano.
There are benefits for both retail landlords and high-end eateries for those kinds of restaurants to lease at malls, according to Lai.
"In the current retail landscape, many shopping centers continue to grapple with anchor vacancies, which has opened the door for larger, experiential concepts like Eataly to enter suburban markets as destination tenants," she said.
Having a premium food-and-beverage option can elevate an entire mall, according to Lai.
"Shopping centers are increasingly focusing on premium dining options to enhance the overall image and experience of the mall," she said. "High-quality dining experiences, particularly brands like Eataly, elevate the overall perception of a mall and draw in customers who see dining as a key part of their visit."
New locations
As for next year's expansion, it includes urban and mall sites. Eataly will be opening its fourth locations in both New York City and Toronto. Eataly debuted its first store in North America in 2010 in New York's Flatiron district, with two more opening since then. The fourth site will be coming to Hudson Yards next year.
In Toronto, Eataly is already open at Yorkville, Sherway Gardens and most recently at the Shops at Don Mills. At its fourth site at CF Toronto Eaton Centre, Eataly will be taking over part of a former Nordstrom space at the mall. CoStar data shows it to be about 25,000 square feet. Eataly has struck a multilocation partnership with retail landlord Cadillac Fairview to open at Sherway and Don Mills, and now at the Eaton mall, according to published reports.
Eataly next year is entering Florida with its first location slated for the Aventura Mall in the Miami area this spring 2025, with a two-level store near a Nordstrom. The location measures about 30,000 square feet, according to CoStar. The second Eataly in Florida is expected to open next fall at CityPlace in downtown West Palm Beach.
The chain will make its debut in Pennsylvania at the King of Prussia mall early next year. It will be leasing about 23,000 square feet that was previously leased by Rite Aid and Forever 21.