Federated tests Macy's bistros

Macy's stores will offer big-name restaurants with the hopes of getting big-time profits

CINCINNATI » The owner of Macy's department stores plans to test bistros, gourmet restaurants and Starbucks coffee shops at some stores in an effort to draw customers and keep them shopping longer.

The new in-store restaurants and cafes, featuring such famed chefs as Wolfgang Puck and Todd English, come as Federated Department Stores Inc. focuses on building Macy's as a national brand. Federated will change its name to Macy's Inc. if shareholders approve the switch in Friday's annual meeting.

Fancy tea rooms and restaurants were common years ago at large department stores and are making a comeback among many retailers. High-end stores like Nordstrom and Neiman Marcus have restaurants, and Federated already offers dining at some of its larger urban stores -- including Macy's stores in New York City and Chicago.

"It would be great to be able to shop and go out to lunch in one stop," said Kristi Burkett, 21, outside a Cincinnati Macy's store.

Macy's shopper Marie Short, 79, of the Cincinnati suburb of Batavia, said she would like to see store restaurants return.

"If you get tired, you can take a break without having to leave," Short said.

Federated's strategy is to improve the shopping experience while differentiating Macy's from competitors, Vice Chairman Tom Cole recently told investors.

The Cincinnati-based company operates more than 850 department stores under the Macy's and Bloomingdale's names. It converted regional department stores gained in its 2005 acquisition of the May Department Stores Co. to Macy's but continues to struggle to win over the May shoppers.

Federated seems to be struggling with sales nationwide, posting a 2.2 percent decline in same-store sales for April. Same-store sales, or sales at stores open at least a year, are considered a key indicator of a retailer's health.

The longer retailers can keep customers in their stores, the more they will spend, said James Dion, president of the retail consulting company Dionco Inc.

"Combining services so shoppers can grab a bite to eat and shop in one place plays right into the lifestyle of a lot of consumers," Dion said.

Food services planned in Florida include a Figs restaurant by English, Wolfgang Puck Gourmet Express restaurants and Macy's Taste Bars that will offer soups, sandwiches, salads and other signature items.

La Brea Bakery operations are planned for some California stores, and the company will test a food court at the South Coast Plaza Macy's Home Store in Costa Mesa, Calif. It will have a common kitchen and eating area and feature a Frontera Fresco from chef Rick Bayless, a Cat Cora BBQ and a Burger Bar from Marcus Samuelsson.

More department stores understand that if they want customers to spend a lot of time in a large space, they have to provide refreshment, said Wendy Liebmann, president of WSL Strategic Retail.

"Once they are tired and hungry, they are out the door," Liebmann said.