Fast food and coffee chains are opening smaller, takeout-only stores
Chick-fil-A’s new New York location has everything you want from a chicken shop: friendly servers, crispy waffle fries, and a line of hungry customers. There’s only one thing missing: seats.
The store, which opened on the Upper East Side in March, is the first in the chain to exclusively handle takeout and delivery orders. It’s part of a trend of small, takeout-focused stores that boomed during the pandemic and remained popular, especially among Manhattan’s coffee and fast-food chains.
Between 2019 and 2023, the average size of a commercial lease in Manhattan decreased by 17%, to 2,585 square feet, according to the CoStar Group, a commercial real estate data firm.
That decline was most visible in coffee shops, where Manhattan residents found themselves with fewer seats, said Gregory Zamfotis, founder and chief executive of Gregorys Coffee.
“In many places, because of staff turnover or because other businesses have made changes to reduce seating capacity, people simply have fewer options for housing,” Zamfotis said.
It is difficult to determine precisely how much smaller cafes and fast food restaurants have become. Many commercial real estate agencies, such as CBRE and Cushman & Wakefield, track only a handful of small leases signed by these tenants each year. But real estate analysts, brokers and renters all agree that retailers are cutting staff.
“The smaller the better,” said Steven A. Soutendijk, executive managing director of Cushman & Wakefield. “There are a lot more tenants looking for smaller stores than larger stores. »
Among those thinking small is Benjamin Sormonte, co-founder and CEO of the Maman coffee and bakery chain. Mr Sormonte plans to open more Miniature Mamans – aptly called Petite Mamans – after opening the first in Moynihan’s train hall in 2022.
Small Maman boutiques range in size from 350 to 800 square feet, while a full-service Maman boutique can be as large as 3,200 square feet, Mr. Sormonte said. The smaller stores allow it to target customers on the go and give it more flexibility when looking for new locations, a crucial advantage given Manhattan’s historically low retail availability.
Buffalo Wild Wings, Starbucks, Blank Street Coffee, and even Whole Foods have also announced or rolled out smaller, grab-and-go-focused stores in New York City alongside their existing outposts. Blank Street, in particular, was born out of the small-format model: Most of its stores are under 350 square feet and designed to serve customers at a rapid pace.
“Every retailer that’s trying this has both models,” said David Firestein, managing partner at brokerage firm SCG Retail. “Brands that have 10, 20, 50 or 100 stores are constantly looking at the model and constantly evolving and evaluating. That’s what good retailers do.”
Chick-fil-A has both on the Upper East Side, with its new mobile store on Second Avenue at East 80th Street, just a few blocks from a more traditional sit-down location on Third Avenue at East 86th Street. Jared Caldwell, the owner and operator of both stores, said he wanted the new store’s design to complement the first and accommodate the growing number of digital orders.
Small stores have another huge advantage over full-sized stores: lower rents.
For example, Gregorys Coffee’s locations range from 400 to 1,800 square feet in Manhattan, Mr. Zamfotis said, and it seeks rents between $100 and $300 per square foot. Within these ranges, the cheapest 1,800 square foot store would cost $60,000 more per year than the most expensive 400 square foot store.
“It’s sometimes hard to justify paying those extra three, four, five hundred square feet for seats you don’t necessarily need,” Zamfotis said. “We don’t need a huge number of seats. We just need enough to accommodate some of the traffic that wants to stay.”
For coffee shops, the small stores represent a departure from the “third place” business model, popularized by Starbucks, in which stores function as separate spaces from work or home where people can linger for hours , talk to friends and make new ones.
Third places can be anything — your hometown bar, a public park, even a fast-food restaurant like McDonald’s — as long as people gather there, said Kathy Giuffre, professor emeritus of sociology at Colorado College. Where fast service, short hours or space constraints limit social gatherings, loneliness and isolation can grow.
“The profits are probably big in places that can get you in and get you out very quickly,” she said. “The social costs are invisible, but very profound.”
Mr. Zamfotis, however, doesn’t think small-format stores spell the end of the coffee shop as a third venue, even given Manhattan’s limited space and high rents.
“I’m a big believer in the future of third places,” he said. It may be a different version, he noted, “but they’re always going to exist because people always want a place to gather. And the coffee shop has always been that central meeting point for people.”
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