Canadian Restaurants Branch Out to Food Shops

For restaurateurs, retail is a natural extension while their customer base is a natural fit for the retail experience.

June 02, 2011

TORONTO - When chef Steve Mitton and operator Paddy Whelan wanted to expand their Ottawa restaurant Murray Street Kitchen, they didn??t choose to open yet another restaurant in the city??s competitive scene. Instead, they opened a food shop, an increasingly popular choice for restaurateurs, the Toronto Globe & Mail reports.

The couple??s new Murray??s Market, which sits kitty-corner to Murray Street Kitchen, sells artisanal food products providing customers with many of the same ingredients they use at their restaurant.

"Over the last three years, we got so many questions regarding our farmers and where we source [things] out ??" Mitton says. "The market just came into our head right away."

The model is a similar one many business owners are adopting, merging restaurants with retail to generate new revenue streams. For restaurateurs, retail is a natural extension of the work they already do, while their customer base is a natural fit for the retail experience.

"People at the restaurant will be sending people over here" to the market, Mitton said. Meanwhile, "we??re over here selling meats retail and saying, 'Hey, you wanna know how to cook it? It??s on special over at Murray Street right now.?? "

San Francisco-based hospitality consultant and food trend forecaster Andrew Freeman predicts the mixed restaurant-retail model will become a top 10 restaurant trend for 2011. New York??s Eataly food emporium, backed by celebrity chef Mario Batali, is one example, he said. The 50,000-square-foot market hall includes restaurants, cafés, groceries and wine.

"Popular market items can actually drive traffic to the restaurant. If people really love a sauce or a bakery sandwich or pastry, they can assume that the restaurant behind it is very good," Freeman said. "The converse is also true. The restaurant drives traffic to the retail outlets - if you love a restaurant, you??ll probably love the treats for sale in their retail outlet."

Freeman added that a retail business also allows restaurateurs to access customers when they aren??t sitting down for a meal, which prompted Toronto??s Lakeview Diner to open their Lakeview Storehouse last month, a food shop next door to their restaurant.

"It??s a really nice addition and people feel the continuation of the [Lakeview] theme and the customer service," said co-owner Alex Sengupta. "If you don??t feel like dining but you want some ready-made food, like ready-made sandwiches or frozen lasagnas or limes and apples and bananas and carrots and potatoes, you can pick it up here."

"The synergies are amazing," said Eric Pateman, president of Edible Canada, commenting on the restaurant-food shop trend. "You??ve got that opportunity now to try retail products in a setting where you can actually sample them. And from a retail perspective, you get that up-sell of people who are sitting in your restaurant or your bistro, going 'Oh my God, lobster oil. Where in the world do I get that??? "

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