Bringing Shoppers High-End Names

When The Irvine Co.'s Fashion Island announced that a Dean & Deluca would soon be coming to Fashion Island, there was excitement in the air. A Dean & Delucas in Orange County? People into designer name food just couldn't seem to get enough of this new fasionable food news.

On the flip-side, the announcement seemed to echo a new trend among shopping centers in attracting high-end retailers, especially those selling gourmet foods and baked goods, to lease space in their shopping centers in hopes of attracting those big-spender customers. The question to ask, is whether bringing the brands will really work.

South Coast Plaza's Crystal Court side will be the temporary home of Wonderland Bakery, which will open a holiday space just for the season. The two-year-old company originally hails from nearby Newport Beach and has become quite successful with its nearly $4-dollar cupcakes and the like.

Across Southern California, we see this trend occurring nearly everywhere with niche food retailers who are selling brands and are hot tickets right now for wherever these companies decide to buy up real estate property for their next store outlets.

Pinkberry, the popular frozen yogurt outlet, which quietly built a following around the idea of gourmet, trendy frozen yogurt is another example of how popular food retailers may be one minute, but will they remain that way for a shopping center in the long run? The company began to quickly expand, but now all the press about the retailer seems to be about its legal battles over using the terminology "frozen yogurt" to describe its product. In addition, several knock-off frozen yogurt retailers are trying to gain some of Pinkberry's market share.

So, is investing in a gourmet retailer really going to spell success for a shopping center or mall in the long run? Will those types of retailers really have the longevity of say, a Macy's, or other established retailer?

Look at what happened to Krispy Kreme. The trendy doughnut outlet became hugely successful a few years ago. One couldn't go into a Krispy Kreme without having to wait in a huge line. However, the buzz over the retailer is over now which explains why the company is expanding at a slightly slower pace. So, will this be the same fate as other types of hipster, food retailers?

Tesco, from the UK, is willing to bet not. The company announced various Southern California locations for its Fresh & Easy stores. The stores are supposed to offer grocery shopping perks in a smaller format that gets customers in and out, but whether Tesco will really grab a large percentage of the marketplace remains to be seen. They may be wildly successful in the beginning simply due to novelty but whether that will last is dependent on their products.

And novelty is really what it's all about. Novelty is why Sprinkles can sell a cupcake for $3.25 when everyone knows you can spend $3.25 to buy a box of Duncan Hines cake mix and make two dozen cupcakes yourself (that are probably more moist and just as good). Novelty is why Dean & Deluca is branded as this gourmet grocer when there's nothing wrong with going to a regular grocery store. So, it all comes down to customers and whether they will be fooled into the brand name allure.