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McAlister's Is The Next National Chain Pushing Into Urban Neighborhoods

McAlister's Deli is the latest national retailer to adapt its suburban bread-and-butter locations to the smaller dining rooms, focus on to-go orders and sleeker and more modern looks to cater to a finicky urban audience. 

McAlister's Deli President Joe Guith

Of more than 400 McAlister's Delis across the country, none are quite like what the chain has coming for West Midtown Atlanta.

“I don't know that we have anything that's quite this urban," McAlister's President Joe Guith told Bisnow. "This is definitely a unique venue for us."

Guith said McAlister's Deli, owned by Atlanta-based Focus Brands, hopes to use this location as a model to roll out urban locations across the U.S.

McAlister's is not the first suburban chain eatery to seek a place in America's new urban landscapes, International Council of Shopping Centers Vice President Stephanie Cegielski said.

“I think that different communities demand different things,” Cegielski said. "Those national chains, whether it be Cheesecake Factory or Maggiano's, are still very much in demand."

The prize for restaurants is alluring: Grab the attention of a very compact trade area and become entwined in the local community.

“It's a very captive audience,” she said.

Rendering for the new McAlister's Deli in West Midtown, the chain's first true urban eatery.

McAlister's West Midtown restaurant — part of Fuqua Development's West Midtown Center at Northside Drive and 17th Street, in the shadow of Atlantic Station — will be the chain's first true urban location, Guith said.

The West Midtown store will also be the 29th company-owned store of its entire chain, and will be a major litmus test to see if McAlister's can thrive in urban environments where buzzwords like “authentic” and “chef-driven” dominate the landscape. Guith is banking on college students from Georgia Tech and other nearby universities who want lower-cost options compared to trendy, artisanal fare.

“I think the foray that we have right now with West Midtown will be very telling,” Guith said. “Obviously, West Midtown is a hotbed for culinary innovation. At the same time, you have a college town right there. Not everybody is looking for a bison burger with caramelized onions.”

National chains have already made inroads into urban communities. Atlanta-based Chick-fil-A has been making big splashes with New Yorkers in recent years. West Midtown Center, which will be anchored by Kroger, also will be home to other national eateries like Zaxby's and Chipotle.

“Look at the success of Chick-fil-A or Cook Out or Krystal. Those are high-performing stores,” The Shumacher Group founder Harold Shumacher said. “Sometimes we forget that the whole world is not 23-year-old millennials who take Uber everywhere. If you're looking to grow, you can't ignore an urban market.”

That said, it is more challenging for a chain restaurant to physically fit into urban environments. Many of the spaces are adaptive reuse projects; former warehouses or renovated properties first built at the turn of the last century. That is forcing the retailers to shrink or change their footprints, Cegielski said.

“That means they're really embracing omnichannel,” she said.

Rendering of the interior of McAlister's Deli's West Midtown location in Atlanta

Things like engaging in a broader social media presence and facilitating online food couriers like UberEats and Grubhub. For McAlister's, the new Midtown location will be 3,100 SF. Its other restaurants start at 3,500 SF, Guith said. The facility will also have a drive-thru window — only 5% of its locations have it — and a to-go pickup lane in the restaurant, which is in just 10% of McAlister's locations now.

What is most attractive to McAlister's is that West Midtown is a more defined neighborhood than other Atlanta neighborhoods, Guith said. That helps the restaurant reach out and connect to the local community better.

“That is why we can thrive in very small towns at very high volumes. Shockingly high,” he said. “Atlanta is not a university town, per se. But arguably, West Midtown is.”