Dive Brief:

• Mondelēz International's Sour Patch Kids has opened a retail store offering merchandise, candy and a dessert bar in New York City, according to a press release.
• The store, located downtown on Bond Street and Broadway, is operated by specialty candy retailer It'sugar and offers a range of limited-edition merchandise including mugs, T-shirts and socks. Shoppers can create their own candy mix and pose for photos with "the Kids" — the brand's candy mascots — inside a full-size yellow taxi.
• The venue also features a Sweets Bar with classic desserts like smoothies, cookies and ice cream, revamped with the brand's sour-then-sweet spin. The brand is collaborating with local dessert shop DŌ, Cookie Dough Confections for a Sour Patch-inspired edible cookie dough.

Dive Insight:

Snack and candy marketer Mondelēz is making a bold move by opening a store in NYC at a time when retail has been hard hit and traffic remains sluggish even as local restrictions on businesses are slowly lifted. The situation is bad enough that some retail chains have decided to shut their doors and leave the city, The New York Times reported.

The retail store seems reminiscent of a marketing play from pre-pandemic days, when in-person experiential retail was a focus for many big brands looking to engage consumers across channels. The press release for the Sour Patch Kids store points to a similar reason for why the brand decided to open a shop while recognizing the challenges inherent in the strategy during a different era. 

"We created this new experience for our fans to engage with the Sour Patch Kids brand on a whole new level, but of course understand that these are uncertain times," Brand Manager Danielle Freid said in the release.

The press release calls attention to steps the brand is taking to keep store visitors safe while noting the ability to order candy mixes online. Sour Patch Kids has promised to limit the number of people allowed in the store, is requiring shoppers to wear masks and has a sanitary process in place for tongs and scoop tools. The Sweets Bar, likely an offering that could drive people to visit the store, will only feature a to-go menu until the city permits indoor dining, putting a damper on the store's launch. It remains to be seen if these steps will be enough to entice consumers or if they're still wary of self-service food stations.

Mondelēz's sales have been under pressure during the pandemic as its candy and gum brands are not getting the same boost its Oreo brand has. Other consumer packaged goods marketers like PepsiCo have also seen a lift in sales during the pandemic for snack brands as consumers hunker down at home.

The new candy store is located between the SoHo shopping district and New York University's Washington Square campus, a prime location for targeting university students and a busy shopping area before the pandemic. For now, New York University will return to in-person classes in September, but that could change at any time.

NYC had a glut of retail space even before the pandemic hit, Bloomberg reported. Now, asking rents in Manhattan are down to 2011 levels and vacancies are up in prime shopping locations, a scenario that could entice more mass market brands to open retail stores as they look for ways to drive excitement with consumers.