Can Restaurants Give Barnes & Noble a Boost?

With the proliferation of online marketplaces, Barnes & Noble has had to evolve its offerings to keep pace. Its latest move—to start adding full-service restaurants—might be the boldest yet.

January 2017 Gary M. Stern

As sales at bookseller Barnes & Noble sag and dip annually, something had to be done to jumpstart revenue. When in doubt, experiment.

In December 2016, B&N introduced three full-service Barnes & Noble Kitchens at stores in Eastchester, New York—a suburb 18 miles north of New York City—Edina, Minnesota, and Folsom, California. But will the synergy between books and dining click?

B&N’s sales have fallen to $4.1 billion in fiscal 2016 from $4.3 billion in 2015 and $4.6 billion in 2014. Moreover, it cut its number of retail stores from 691 four years ago to 640 outlets in 2016. And its long-term CEO Leonard Riggio retired on September 16.

Why is a book-selling company turning restaurateur? As offbeat as it might sound, B&N actually has extensive experience running and operating 600 cafes sourced by Starbucks products for 28 years, says David Deason, its Dallas-based vice president for development.

“We are the second largest coffee shop [in the U.S.],” he says. Deason also explains that the retailing world has dramatically changed over the last 20 years, and B&N needed to adapt to a changing landscape. In this case, that move entailed developing full-service eateries.

“Organizations need to challenge themselves to change, be creative, embrace new challenges and enrich their offerings. If it’s just the same old thing, they become stale,” he says.

Deason says that the three B&N Kitchens were all opened at new stores and not reconfigured into existing shops He acknowledges that the process is currently at an “embryonic” stage.

John Labbe for Barnes & Noble

The Eastchester location can seat 80 inside and 40 on its extensive patio during warmer months.

“We intend to study aggressively and thoroughly what we’ve done, what works and what doesn’t, and get feedback from customers and staff, to find a path for the future,” he says.

B&N Kitchens are open from 9 a.m. when the bookstore opens until 10 p.m. closing time, serving breakfast, lunch, and dinner. Deason describes the concept as “very familiar, approachable food and beverages in a well-designed environment that allows Barnes & Noble’s long-standing customers to come in and enjoy the experience, more robust and enriched than the past.”

By providing another option of a full-service café, he says the goal is that “our customers will visit at times for just books, at times for the Kitchen, at times for events in the store, and sometimes for each activity.”

The Folsom and Edina B&N Kitchens are about 2,600 square feet while the Eastchester store, including an outdoor patio, covers 4,000 square feet. The Edina site seats 100 patrons, the Folsom eatery accommodates 140, and the Eastchester handles 80 inside and 40 on its extensive patio during warmer months.

The B&N Kitchens are woven into the bookstore, not apart or separate. Deason describes an alluring atmosphere in which patrons enter the eatery and can “sit down and enjoy a cappuccino, grab a glass of Chardonnay or great local craft beers.”

There are workstations where guests can spend extensive time dining, sipping coffee, and checking emails or working on their laptops. “Or they can sit back with a magazine or share a nice plate of guacamole with friends,” he adds.

B&N hired the Santa Monica, California-based Branstetter Group, a hospitality consulting company, and consultants AvroKO, to design the restaurants.

Consultant James Branstetter says B&N asked them to “develop a concept that had a sense of community with the bookstore.” B&N’s goal was to create a thriving eatery that was “casual, where you could grab a book, sit down in the restaurant and have a meal,” he says.

John Labbe for Barnes & Noble

Early feedback suggests that the cafes are busiest at breakfast and lunch but slow down at dinner.

The design encourages a sense of community and includes long tables where people could dine at any meals and also included small tables for two. The goal was having a restaurant that “complimented the bookstore and didn’t depart from the B&N cafés of the past,” Branstetter says.

The menu could be considered upscale based on entrees such as $26 beef short ribs, $24 salmon, and $20 brick-cooked chicken. But Branstetter says its most popular items are the $14 grilled cheese sandwich and at breakfast the $5 pastries and $13 lemon ricotta pancakes.

Early feedback suggests that the cafes are busiest at breakfast and lunch but slow down at dinner. “Dinner has been the stretch meal. We need to develop a customer that comes back to the Barnes and Noble and eats dinner,” says Branstetter.

Deason expects that two or three new Barnes & Noble kitchens will launch in 2017, again inside of new stores. He expects that more eateries will debut in new stores in the future rather than be retrofitted into existing stores.

He denies the notion that developing full-service restaurants is a strategy to spike revenue at a time when it’s been stagnating. “That’s a separate issue. We’re doing new things to invigorate and change and find new appropriate offerings,” he says.

But success will be based on “sales from the business and how the Kitchen influences the guest experience in the entire store,” Deason says.