The Business of Eataly: How Restaurants & Retail Drive Revenue Together

The Business of Eataly: How Restaurants & Retail Drive Revenue Together

The Business of Eataly: How Restaurants & Retail Drive Revenue Together

There’s a motto at Eataly, the enormous, awe-inspiring food hall from Mario Batali’s team, with locations in New York in Chicago. It’s “Eat, Shop & Learn,” and it sums up the business model perfectly: visitors can come in for a sit-down meal at a restaurant, stay and shop the same products they just enjoyed, and recreate the dish at home themselves.

The space is stocked with walls and walls of dried pasta, olive oil, balsamic vinegar and other staples of Italian cooking. There are fresh ingredients, too, including a butcher and a fishmonger, as well as a place to buy fresh and stuffed pastas. And then there are full-service restaurants — some that even take reservations.

To learn how the business works behind the scenes, we talked to Kevin Gil, General Manager of Restaurant Development for Eataly USA, who oversees restaurant operations and new store openings (coming soon to the World Trade Center, Boston, and Los Angeles). Here’s how each part of the company works together to build business, drive revenue and delight guests.

The Business of Eataly: How Restaurants & Retail Drive Revenue Together

Eat

Eataly’s restaurants are fairly specialized — there’s a pizza and pasta concept with authentic Neapolitan pies; a fish and seafood concept; and a vegetable-focused concept focused on seasonality, simple preparations and high-quality ingredients.

In New York and Chicago, most restaurants are first come, first serve, but there are also more formal restaurants in each location that follow a traditional reservation model. Because of the restaurants’ unique operations, they rely heavily on waitlist management: people may grab a glass of Prosecco at the piazza while waiting for a table at La Pizza & La Pasta. Then, the staff will text them when their table is ready.

“It’s our job to keep people in the building — let them explore other parts of the store, and be as accurate with our quote times as possible and get them seated as soon as we can,” Kevin says.

Because there are so many concepts under one roof, the Eataly staff can give guests more options than a traditional restaurant would be able to. (If there’s no table for eight available here, there might be a few steps away.) Each restaurant is set up as its own profit center, so the team looks at sales, labor and costs for each one. And while there is a bit of friendly competition between the restaurants, the ultimate goal is to keep them at Eataly.

“They’re still dining in our restaurant, they’re still getting a high-quality product, and the revenue is still under the Eataly umbrella. In the end, the goal is that the guest has an enjoyable experience at Eataly.”

The Business of Eataly: How Restaurants & Retail Drive Revenue Together

Shop

The retail component of Eataly operates somewhat independently from restaurants, and Kevin says the restaurant business is a bigger revenue generator, though not significantly.

Orders are placed across the shop and restaurants, and when they come in they are allocated accordingly between restaurants and retail. And the “Eat, Shop” relationship allows Eataly some flexibility: if a restaurant is running low on a cut of meat, they can take from the butcher’s stock. On the flip side, if there’s overflow in one retail area, they can find a way to use it in the restaurants.

“It allows us to avoid at all costs 86-ing anything off the menu, because we have so many different resources,” says Kevin.

The Business of Eataly: How Restaurants & Retail Drive Revenue Together

Learn

Customers at Eataly run the gamut, from tourists to locals, and from people who have sold Italian wines for 30 years to those who have never heard of Sangiovese. That presents a huge opportunity for the staff to tell guests the stories behind the products and, hopefully, for guests to take their favorites home.

Educating visitors starts with educating the staff. When opening a new store Kevin conducts three to four weeks of in-depth training with employees on products, bringing in experts on cheese, olive oil, and pasta making, as well as a house sommelier. The whole staff learns from large-format classes, manuals and constant reinforcements during pre-shift meetings.

It may sound strange to hold a pre-shift meeting while people are walking in front of you with shopping baskets, but Kevin relishes the interaction.

“We encourage people walking around to come and listen to what we’re talking about,” he says. “It’s an education piece — somebody can leave the store feeling like they’ve learned something. And it’s an opportunity for a sale.”

Aside from pre-shift meetings, servers are trained to use their product expertise to help guide guests in their shopping experience. Guests may be sitting at a table ten feet away from a shelf holding the exact pasta they just enjoyed in a restaurant, so being able to share in-depth knowledge about the products goes a long way.

“My most pleasant experiences on the floor are with people who have never been to Eataly, who don’t drink Italian wines, who are looking for guidance from us,” says Kevin. “We’re based on quality and education, and bringing that retail aspect gives us more room to expand on the intricacies of our product.”

The Business of Eataly: How Restaurants & Retail Drive Revenue Together

…and Adapt

Multi-concept spaces are popping up across the country, and Kevin likes to think the trend has caught on thanks to Eataly’s success. “It definitely works,” he says.

At the same time, the business is relatively new. There’s no playbook. That means plenty of opportunities for experimentation and evolution, and a constant need to stay fresh and relevant.

In Chicago, for example, many people asked for a restaurant with more variety, instead of the specialized concepts they started with. They adapted a meat-focused restaurant to include pasta, vegetables and fish, so that large groups of guests could find something for everyone.

There’s one thing Kevin is sure of: adventurous diners are out there looking for new, varied experiences, and that’s another reason non-traditional restaurants have gained popularity.

People always want to change and experience new things, so multi-outlet concepts like this provide a different experience every time you go in. You can come into Eataly 20 times a month and have 20 different experiences. That’s what we’re offering.”

Photos courtesy of Eataly.

How to connect with diners during a pandemic: Your guide to personalized email marketing

How to connect with diners during a pandemic: Your guide to personalized email marketing

The world is changing fast and restaurants are trying to adapt just as quickly. Now is the time to get...
Open for Business
10 tips to start and expand your outdoor dining experience

10 tips to start and expand your outdoor dining experience

Dining rooms are opening and closing across the country, but sitting outside is among the safest ways to eat out...
Open for Business
In it Together: taking care of the industry with Edward Lee & Jessica Koslow

In it Together: taking care of the industry with Edward Lee & Jessica Koslow

OpenTable’s new weekly webinar series, In it Together, tackles key topics facing the industry during the COVID-19 crisis. What does...
Olivia Terenzio
Q&A's See all
In it Together: tough calls and closures with Lien Ta & Shehzad Roopani

In it Together: tough calls and closures with Lien Ta & Shehzad Roopani

OpenTable’s webinar series, In it Together, tackles key topics facing the industry during the COVID-19 crisis. What does hospitality look...
Open for Business
In it Together: taking on the insurance industry with Naomi Pomeroy & Robert J. Nelson

In it Together: taking on the insurance industry with Naomi Pomeroy & Robert J. Nelson

OpenTable’s webinar series, In it Together, tackles key topics facing the industry during the COVID-19 crisis. What does hospitality look...
Olivia Terenzio