Reinventing the food hall

This was meant to be the year Pusateri's Fine Foods conquered Toronto and then headed south.

The born-in-Toronto gourmet food boutique, which built a luxury brand from a market stall, had finalized a deal with Saks Fifth Avenue to create food halls in its new GTA locations and was keen for an even more ambitious expansion. Both companies agreed to take the Saks Food Hall by Pusateri's concept – upscale food markets within Saks department stores – to Miami before potentially spreading to other U.S. cities.

"Opening within a Saks store gives us instant credibility and the demographic of our customers is right at our doorstep," Pusateri's president and CEO Frank Luchetta said.

Then, quite literally, the plan went up in flames.

In the summer of 2015, executives had just signed off on the design for the Miami location, Mr. Luchetta said, when a fire started by an electrical malfunction in a produce fridge heavily damaged the long-time Pusateri's operation on Avenue Road. The flagship store, corporate headquarters and a central meat plant all had to be rebuilt.

Mr. Luchetta said the family made the decision to pull the plug on the American dream – at least for now.

"We just felt we couldn't execute this new store properly. It would have meant a fifth new build in a calendar year and one in a brand new market in a different country. We felt we had to get it right."

Saks was understanding and the hope is to forge ahead when the timing is right, Mr. Luchetta said.

The Pusateri-Saks partnership began about three years ago, when Mr. Luchetta heard that the New York-based Saks, acquired by Hudson's Bay Co. in a $2.9-billion (U.S.) deal in 2013, was coming to Canada.

He knew some HBC executives and asked for governor and CEO Richard Baker's phone number.

"I just cold-called him. I introduced myself, explained what we do … and told him I wanted to build the Harrods of North America."

The iconic London department store is the epitome of the opulent European food-hall model, where shoppers can take home everything from boots and bedding to carrots and caviar. Once popular in North America, no one else has revived it, Mr. Luchetta said.

"Our customer is exactly the Saks customer, except my customer shops three times a week, versus the Saks customer three times a month," said Mr. Luchetta, who has led Pusateri's for 20 years.

"It made all the sense in the world the two should live together."

Mr. Baker, he said, got it right away and the instant the HBC deal closed to bring Saks to Canada, Mr. Baker came to Toronto to see the Pusateri's stores. Soon, an agreement in principle was in place.

The two executives visited the great food halls in Paris and Berlin and, of course, Harrods. And by March, the first Saks Food Hall by Pusateri's opened at Sherway Gardens in Etobicoke. A second location opened Thursday at the Toronto Eaton Centre. At 25,000 square feet, it almost doubles the Sherway footprint.

The food hall features stations ranging from the traditional meat, cheese and produce centres to the more unusual – a champagne bar, an artisanal pizzeria and a gluten-free, soy-free, vegan, nut-free and preservative-free bakery.

Providing upscale, destination food offerings is part of an overhaul of the Saks Fifth Avenue brand.

"Saks is transforming and the role a luxury store plays in someone's life is changing," Saks Fifth Avenue president Marc Metrick said.

"We can't just provide simple transactions. People can do that online. We have to create a connection with the customer and an experience in our stores. The food hall is an important way to become more essential to our customer."

Those food halls will feature different partners. The new Miami Saks store, in a just-opened mall in the upscale Brickell neighbourhood, will include an open kitchen and marketplace operated by a local Mediterranean restaurant.

Mr. Metrick said a food partner for an upcoming Saks store in Calgary has not been announced and another coming to Montreal will feature a "Quebec-inspired" food hall. He declined to talk about any potential partnership with Pusateri's in the United States.

But for now, Mr. Luchetta said Pusateri's is focused on the GTA.

Pusateri's, a 54-year fixture in Toronto, expanded outside the city for the first time with an Oakville store that opened in July.

And the emotional cap on the year is the Nov. 17 reopening of the rebuilt Avenue Road flagship, Mr. Luchetta said.

Though the family sold the site and some adjacent properties it owned to First Capital Realty Inc. in September for $63.2-million (Canadian), they still consider it the business's home. The interior of the store is all new but the nostalgic family ensured that it's laid out exactly as it had been before the fire.

"It's certainly been a crazy time," said Mr. Luchetta, younger brother of vice-president Ida Pusateri, whose late husband, Cosimo, worked at his family's produce stand from the time he was a boy and led the transformation from neighbourhood shop specializing in Italian food and products into a purveyor of gourmet, artisanal and imported products.

Pusateri's has jumped into new markets wherever it has found them, including a catering business that has it serving meals for everything from a dinner for two to weddings for 1,000 and corporate events for 10,000 to a business trip on a private jet. The company even made weekly deliveries to Muskoka during the summer for gourmet cottage living.

The jet-set catering started the way so many things in retail do: a customer asked. Many of Pusateri's in-house recipes come out of dishes customers have tried abroad, corporate chef Tony Cammalleri said. And when a customer asked if Pusateri's could deliver food directly to his jet, the answer was yes.

"We're in the business of building long-term relationships with our customers, so if they ask us for something, we will do whatever we can to make it happen."

When charter carriers saw what Pusateri's could offer – everything from charcuterie boards to shucked oysters to flank steak – they got on board, too. Customers can call the day before and order from a catering catalogue or order something customized.

"With a gourmet store behind us, the sky is the limit for any menu item. It's really whatever your heart desires," Mr. Luchetta said.

All the food is prepared in the company's 20,000-square-foot commissary at Dufferin and Lawrence that opened in 2012 to feed all the stores and the catering operation.

At peak times, such as Christmas, Pusateri's is catering about 20 private jets a week and there is lots of room to see that grow at Pearson and other local airports, Mr. Cammalleri said.

And then the airline catering can easily be exported and adapted to American cities when that southern expansion happens, Mr. Luchetta said.

"We expect we might be catering on yachts in Florida one day."