Barnes & Noble’s Restaurant Venture Isn’t Going Very Well

Barnes & Noble’s 2016 announcement that it would open a collection of in-store, full-service restaurants was met with some skepticism: What on earth does a bookstore chain know about running a restaurant?

Not a whole lot, as it turns out. There are now five Barnes & Noble Kitchen locations serving fancy charcuterie plates and $26 short ribs to some of the nation’s wealthiest suburbs, and by the company’s own admission, they’ve proven to be a financial failure. On an earnings call Thursday, company chairman Len Riggio said the foray into restaurants has been “a very mixed bag.”

“I have no experience in the hospitality area,” Riggio said, going on to point out the seemingly very obvious: “Things like controlling food costs and payroll costs are not in our DNA. So [it’s] a lot harder than you think it is. So the top line on our restaurants is good. The bottom line is awful.”

Times are tough for brick-and-mortar bookstores, with industry sales falling nearly 40 percent between 2007 and 2017. Barnes & Noble had hoped that adding sit-down restaurants could drive traffic to its stores and give people a reason to shop in person rather than ordering their books online from Amazon. But even without a crystal ball, it shouldn’t have been tough to foresee that delving into the restaurant business, with its razor-thin profit margins and high failure rate, was not the solution Barnes & Noble was seeking.

The bookstore chain has long operated in-store cafes serving coffee and pastries. Based on Riggio’s comments on the company’s earnings call, it sounds like they’ll be focusing their efforts on said cafes and leaving the full-service restaurant business to people who know what they’re doing.

• Barnes & Noble Admits That Restaurants Will Not Save It [Quartz]
• Barnes & Noble Q1 2019 Earnings Call Transcript [Seeking Alpha]