Register FAQ / Rules Forum Spy Search Today's Posts Mark Forums Read
Go Back   MacRumors Forums > News and Article Discussion > MacRumors.com News Discussion

Reply
 
Thread Tools Search this Thread Display Modes
Old Feb 6, 2012, 11:05 AM   #1
MacRumors
macrumors bot
 
Join Date: Apr 2001
Apple's Grand Central Neighbor Seeing 7% Increase In Sales




New York City's Metropolitan Transportation Authority (MTA)'s sweetheart deal for Apple's just-opened Grand Central Terminal retail store seems to be paying dividends for the MTA and neighboring stores. One restaurant is reporting a 7 percent increase in sales since the store opened in December.




Michael Jordan's The Steak House is located across the terminal from the new Apple Store, Grand Central and co-owner Peter Glazier says the restaurant has seen a 7 percent jump in sales in the seven weeks that the Apple Store has been open, reports Crains New York. Glazier also says the rise isn't because Apple replaced another restaurant, Metrazur, in the terminal. "The jump only happened after Apple opened," said Glazier, not in the several months that the space was being renovated as the store was built.

There was some criticism of the deal that Apple and the MTA worked out, most notably around the lack of a revenue sharing agreement which is standard for most tenants of Grand Central. Apple's $60-per-square-foot lease agreement is also significantly lower than what most other tenants are paying. The MTA argued that a flagship Apple Store would bring in significant foot traffic to the terminal, benefiting both other GCT tenants and the terminal as a whole.

The MTA has previously noted that for every 1% increase in sales across the terminal's retailers, the MTA will gain $500,000 in rent due to the percentage rent provisions in place on the leases of nearly every other tenant with the exception of Apple.

MTA's gamble appears to be paying off, for at least one establishment.

(Photo via Yelp/Chris F.)

Article Link: Apple's Grand Central Neighbor Seeing 7% Increase In Sales
MacRumors is offline   3 Reply With Quote
Old Feb 6, 2012, 11:11 AM   #2
*LTD*
Banned
 
Join Date: Feb 2009
Location: Canada
A nice twist on the Halo Effect.
*LTD* is offline   2 Reply With Quote
Old Feb 6, 2012, 11:12 AM   #3
PlaceofDis
macrumors Core
 
Join Date: Jan 2004
its impressive that one store could increase traffic that much, but i am not surprised given just how busy all the apple stores are that i have been to, so there is obvious demand for more stores.
__________________
dim my eyes on the waves of confessions...
PlaceofDis is offline   5 Reply With Quote
Old Feb 6, 2012, 11:14 AM   #4
thejadedmonkey
macrumors 604
 
thejadedmonkey's Avatar
 
Join Date: May 2005
Location: Pa
Send a message via AIM to thejadedmonkey
That seems a bit low. You both remove an empty anchor store, increase foot traffic, and there's a 7% increase? That's the equivalent of an extra 10 tables a night I would estimate. I don't understand how this is news.
__________________
MacBook • 17" MacBook Pro • iPod Nano • Apple TV
PS4 • Custom Windows 8.1 Desktop • WP8.1
"Good judgment comes from experience,
experience comes from bad judgment."
- Mulla Nasrudin
thejadedmonkey is offline   -11 Reply With Quote
Old Feb 6, 2012, 11:20 AM   #5
gotluck
macrumors 68040
 
gotluck's Avatar
 
Join Date: Dec 2011
Location: East Central Florida
Quote:
Originally Posted by thejadedmonkey View Post
That seems a bit low. You both remove an empty anchor store, increase foot traffic, and there's a 7% increase? That's the equivalent of an extra 10 tables a night I would estimate. I don't understand how this is news.
I agree. How would a 7% increase in sales even break even for MTA given Apple's significantly lower rent and lack of revenue sharing.
gotluck is online now   -13 Reply With Quote
Old Feb 6, 2012, 11:20 AM   #6
daxomni
macrumors 6502
 
Join Date: Jun 2009
A little early for the conclusions, don't you think? Not to mention the economy in general is recovering. I'd be shocked if MR was going to give all that credit to Apple alone. Oh, wait...
__________________
iPod 3 | Nano 1/3/6 | Touch 2 | iPhone 1/2/4 | iOS 1/2/3/5 |MBP 2K9/2K10/2K12 | OSX 5/6/7/8 | E4G | GS3 | AOS 2/4 | DOS 5/6 | W31/95/98/XP/W7/W8 | NT4/2K/2K3/2K8
daxomni is offline   1 Reply With Quote
Old Feb 6, 2012, 11:21 AM   #7
basesloaded190
macrumors 68030
 
basesloaded190's Avatar
 
Join Date: Oct 2007
Location: Wisconsin
Send a message via AIM to basesloaded190
Quote:
Originally Posted by thejadedmonkey View Post
That seems a bit low. You both remove an empty anchor store, increase foot traffic, and there's a 7% increase? That's the equivalent of an extra 10 tables a night I would estimate. I don't understand how this is news.
10 extra tables a night, and let's say $50 a table (which is probably on the low side) X 7 days a week X 7 weeks so far = almost $25000 in extra sales without doing a single thing.
__________________
2011 MacBook Pro 15 HR Anti-Glare, Etymotic ER-4p, iPhone 4 32GB
Twitter
basesloaded190 is offline   20 Reply With Quote
Old Feb 6, 2012, 11:22 AM   #8
ernbrdn
macrumors newbie
 
Join Date: Jun 2009
Quote:
Originally Posted by thejadedmonkey View Post
That seems a bit low. You both remove an empty anchor store, increase foot traffic, and there's a 7% increase? That's the equivalent of an extra 10 tables a night I would estimate. I don't understand how this is news.
I voted you back up, not sure why you were voted down in the first place. 7% is nothing to brag about. It's a 7% average for one thing, heck christmas traffice could account for that miniscule amount of increase over a 7 week period. Sure the Apple Store is great but come on everyone wants to make out like it's going to make or break or a buisness. Give it time and let the numbers speak for themselves.
ernbrdn is offline   -13 Reply With Quote
Old Feb 6, 2012, 11:24 AM   #9
gotluck
macrumors 68040
 
gotluck's Avatar
 
Join Date: Dec 2011
Location: East Central Florida
Quote:
Originally Posted by basesloaded190 View Post
10 extra tables a night, and let's say $50 a table (which is probably on the low side) X 7 days a week X 7 weeks so far = almost $25000 in extra sales without doing a single thing.
Sure nothing but MTA losing a boatload of money on a sweetheart deal with Apple. Someone is paying a price.
gotluck is online now   -13 Reply With Quote
Old Feb 6, 2012, 11:30 AM   #10
tlevier
macrumors member
 
Join Date: Jun 2010
Quote:
Originally Posted by gotluck View Post
Sure nothing but MTA losing a boatload of money on a sweetheart deal with Apple. Someone is paying a price.
They aren't losing a boatload. The previous tenant had a lower rent than Apple is paying and their contract had another 7 years or so (can't remember). So, by Apple getting in this space, MTA is making more than they would have.

Further, the $60 per square foot Apple is paying to MTA isn't the total cost. Apple bought out the previous tenant with Millions of dollars up front, and Apple contributed even more to necessary renovations to the building (new elevator is what I heard.)

So, if you're the MTA, and you have someone willing to come in and bring more foot traffic, and that person agrees to improve your building, and that person agrees to pay more than a low rent tenant with a long contract, and they agree to pay-off that tenant.... what is there to say no to?
tlevier is offline   22 Reply With Quote
Old Feb 6, 2012, 11:31 AM   #11
rnizlek
macrumors regular
 
Join Date: Mar 2004
Location: Washington, DC
Quote:
Originally Posted by gotluck View Post
Sure nothing but MTA losing a boatload of money on a sweetheart deal with Apple. Someone is paying a price.
Correct me if I'm wrong, but I thought the MTA was actually getting more per square foot than they did from the previous restaurant that occupied the premises.
rnizlek is offline   20 Reply With Quote
Old Feb 6, 2012, 11:33 AM   #12
gotluck
macrumors 68040
 
gotluck's Avatar
 
Join Date: Dec 2011
Location: East Central Florida
Fair enough, Yes - looked at the rest of the terms versus the previous tenant.
gotluck is online now   4 Reply With Quote
Old Feb 6, 2012, 11:38 AM   #13
ThisIsNotMe
macrumors 65816
 
Join Date: Aug 2008
BUt i thOUgHt APplE CheaTEd oN THeiR LeAsE!!!.
ThisIsNotMe is offline   -10 Reply With Quote
Old Feb 6, 2012, 11:42 AM   #14
gotluck
macrumors 68040
 
gotluck's Avatar
 
Join Date: Dec 2011
Location: East Central Florida
well sweetheart deal does imply that it was not a totally at arms length transaction, one party gets a better deal

Last edited by gotluck; Feb 6, 2012 at 11:52 AM.
gotluck is online now   2 Reply With Quote
Old Feb 6, 2012, 11:47 AM   #15
hobo.hopkins
macrumors 6502a
 
hobo.hopkins's Avatar
 
Join Date: Jul 2008
Quote:
Originally Posted by tlevier View Post
So, if you're the MTA, and you have someone willing to come in and bring more foot traffic, and that person agrees to improve your building, and that person agrees to pay more than a low rent tenant with a long contract, and they agree to pay-off that tenant.... what is there to say no to?
Ah that would be the rational response that one would have to the entire situation. However some in these forums think that Apple can do no right, so your logic won't have any effect on them.

The entire deal works in the MTA's favour.
__________________
Think morality requires religion? Name me an ethical statement made or an action performed by a believer that could not have been made or performed by a non-believer. I'm waiting...
hobo.hopkins is offline   8 Reply With Quote
Old Feb 6, 2012, 11:48 AM   #16
writingdevil
macrumors regular
 
Join Date: Feb 2010
Quote:
Originally Posted by tlevier View Post
They aren't losing a boatload. The previous tenant had a lower rent than Apple is paying and their contract had another 7 years or so (can't remember). So, by Apple getting in this space, MTA is making more than they would have.

Further, the $60 per square foot Apple is paying to MTA isn't the total cost. Apple bought out the previous tenant with Millions of dollars up front, and Apple contributed even more to necessary renovations to the building (new elevator is what I heard.)

So, if you're the MTA, and you have someone willing to come in and bring more foot traffic, and that person agrees to improve your building, and that person agrees to pay more than a low rent tenant with a long contract, and they agree to pay-off that tenant.... what is there to say no to?
The whole rent thing has been debunked long ago and it works in MTA's and other retailers favor, consistently, and that's from independent accounting reports. Some people just won't let go or have to find fault somewhere, and here they land.

"...10 extra tables a night, and let's say $50 a table (which is probably on the low side) X 7 days a week X 7 weeks so far = almost $25000 in extra sales without doing a single thing..."
It's actually more than that. The place is very spendy, food is great, often hard to make a reservation, and serves 200 to 360 depending on configuration. Figure all that in and it's like a grand a night. And both MTA and Apple got so much criticism (mainly from people who didn't know the facts), why not show a first look response....or is it only good to show the negatives?
writingdevil is offline   6 Reply With Quote
Old Feb 6, 2012, 11:53 AM   #17
iMikeT
macrumors 68020
 
Join Date: Jul 2006
Location: California
Nice halo effect.

I say these guys give some discounts to Apple Store customers. Buy an iPad, get 15% off your steak.
iMikeT is offline   -1 Reply With Quote
Old Feb 6, 2012, 12:12 PM   #18
aristotle
macrumors 68000
 
Join Date: Mar 2007
Location: Canada
Quote:
Originally Posted by gotluck View Post
I agree. How would a 7% increase in sales even break even for MTA given Apple's significantly lower rent and lack of revenue sharing.
1. Apple is paying significantly "MORE" per square foot for the space that they are occupying than the previous tenants were because they were paying rent + revenue sharing whereas Apple is paying a flat fee.
2. Apple paid for significant upgrades to infrastructure.

The MTA has the option to either charge a lower rental rate and then collect some more in a revenue sharing agreement or they can simply pay a higher rate and forgo the revenue sharing agreement which is what Apple has negotiated there.

If they were renting out office space, they would likely go with the same kind of arrangement since it is likely that revenue would not actually be directly generated by that office space for a company and would rather be used for supporting internal logistics.
__________________
15" Retina MBP, 2.7 Ghz Quad Core i7, 16 GB RAM, 768 GB SSD (10.9.2)
24" iMac, 2.8 GHz, 4GB RAM, 320 GB HD; 128 GB iPad Air LTE (iOS 7.0.4); 64 GB iPhone 5S (iOS 7.1.1)

Last edited by aristotle; Feb 6, 2012 at 12:18 PM.
aristotle is offline   3 Reply With Quote
Old Feb 6, 2012, 12:18 PM   #19
rdowns
macrumors Penryn
 
rdowns's Avatar
 
Join Date: Jul 2003
OMG, a NYC-based restaurant reports higher sales around Christmas and New Year's.
rdowns is offline   2 Reply With Quote
Old Feb 6, 2012, 12:27 PM   #20
Thunderhawks
macrumors 68020
 
Join Date: Feb 2009
Quote:
Originally Posted by writingdevil View Post
The whole rent thing has been debunked long ago and it works in MTA's and other retailers favor, consistently, and that's from independent accounting reports. Some people just won't let go or have to find fault somewhere, and here they land.

"...10 extra tables a night, and let's say $50 a table (which is probably on the low side) X 7 days a week X 7 weeks so far = almost $25000 in extra sales without doing a single thing..."
It's actually more than that. The place is very spendy, food is great, often hard to make a reservation, and serves 200 to 360 depending on configuration. Figure all that in and it's like a grand a night. And both MTA and Apple got so much criticism (mainly from people who didn't know the facts), why not show a first look response....or is it only good to show the negatives?
Slow news day, so throw in anything to get clicks:-)
__________________
It's ready, when it's ready !
"Any fool can criticize, condemn and complain and most fools do." — Benjamin Franklin
Thunderhawks is offline   0 Reply With Quote
Old Feb 6, 2012, 12:27 PM   #21
NutsNGum
macrumors 68030
 
NutsNGum's Avatar
 
Join Date: Jul 2010
Location: Glasgow, Scotland
Quote:
Originally Posted by rdowns View Post
OMG, a NYC-based restaurant reports higher sales around Christmas and New Year's.
Thumbs up, my friend. Thumbs up.
NutsNGum is offline   3 Reply With Quote
Old Feb 6, 2012, 12:31 PM   #22
thundersteele
macrumors 68030
 
Join Date: Oct 2011
I'm sure there will be an effect in the long term.

However, a mere 7% increase when going from sitting next to a building/renovation site for several month to sitting next to a extremely frequented store is not really that much.

Maybe things get better when there are more new product launches... serving $5 coffee for people waiting in line will be a lucrative business.
thundersteele is offline   1 Reply With Quote
Old Feb 6, 2012, 12:31 PM   #23
chrmjenkins
macrumors 603
 
chrmjenkins's Avatar
 
Join Date: Oct 2007
Location: CA
Quote:
Originally Posted by rdowns View Post
OMG, a NYC-based restaurant reports higher sales around Christmas and New Year's.
No indication whether that was a YOY number or not. I would hope that they would adjust for seasonal income.
__________________
Read my Apple A8, iPhone 6 preview and prediction thread here: http://forums.macrumors.com/showthread.php?t=1770411
Twitter: @anexanhume
chrmjenkins is offline   2 Reply With Quote
Old Feb 6, 2012, 12:39 PM   #24
rdowns
macrumors Penryn
 
rdowns's Avatar
 
Join Date: Jul 2003
Quote:
Originally Posted by chrmjenkins View Post
No indication whether that was a YOY number or not. I would hope that they would adjust for seasonal income.

Well his son's scientific evidence is enough for me.

Quote:
“We know their customers are coming here,” added Mr. Glazier's son, Matthew Glazier. “I'm always looking for the little white bags.”
rdowns is offline   -2 Reply With Quote
Old Feb 6, 2012, 01:12 PM   #25
chrmjenkins
macrumors 603
 
chrmjenkins's Avatar
 
Join Date: Oct 2007
Location: CA
Quote:
Originally Posted by rdowns View Post
Well his son's scientific evidence is enough for me.
Retract my previous statement. Can't argue with anecdotes like that.
__________________
Read my Apple A8, iPhone 6 preview and prediction thread here: http://forums.macrumors.com/showthread.php?t=1770411
Twitter: @anexanhume
chrmjenkins is offline   1 Reply With Quote

Reply
MacRumors Forums > News and Article Discussion > MacRumors.com News Discussion

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Similar Threads
thread Thread Starter Forum Replies Last Post
Grand central station Kashchei OS X Mavericks (10.9) 1 Nov 16, 2013 01:04 AM
6:00am Grand Central Apple or 7:45am Stamford CT Mall Apple? brinycbri iPhone Launch Meetups 1 Sep 16, 2013 12:39 PM
Resolved: Grand Central Dispatch multinode Mac Programming 2 Aug 31, 2013 12:25 AM
iPad Mini: Report from Apple Store Grand Central (NYC) - 70% scalpers in line gusnyc iPad 0 Nov 2, 2012 10:30 AM
Audit Claims Apple Received Favorable Treatment in Grand Central Terminal Lease Talks MacRumors Mac Blog Discussion 69 Aug 7, 2012 05:22 PM

Forum Jump

All times are GMT -5. The time now is 08:12 PM.

Mac Rumors | Mac | iPhone | iPhone Game Reviews | iPhone Apps

Mobile Version | Fixed | Fluid | Fluid HD
Copyright 2002-2013, MacRumors.com, LLC